A new level unlocked: the appealing prospects of gamification in consumer finance
Published on May 27, 2022 by Anurag Sikder
A new level unlocked: the appealing prospects of gamification in consumer finance
Some may call it ridiculous, juvenile, even blasphemous. But no one can ignore the meteoric rise of gaming in the past few decades or its overwhelming global influence. We are creatures of social habit with an instinct to play, and gaming and gamification appeal to all of us. The art of gamification is now going well beyond traditional entertainment and making inroads to previously unexplored realms, including the asset and wealth management industry.
Amid today’s extremely competitive process of attracting and retaining clients, the challenge is discovering innovative solutions. Gamification has found favour among marketers as a tool to capture the attention of the fast-growing Millennial segment of their target audiences. This demographic is likely to become the dominant segment soon. It is no surprise, therefore, that many asset and wealth managers are focused on appealing to Millennials and their successors, Generation Z.
Gamification: the new kid on the marketing block
Gamification is the process of bringing together elements of design and principles of gaming in non-gaming applications to create a better client experience and increase customer utilisation rates. Gamification techniques are intended to leverage our natural desire for socialising, mastery and competition and our innate need to respond to a situation presented as a game. The process offers rewards for the completion of given tasks to engage customers and evoke a degree of commitment.
Heightened competition among financial institutions has forced their marketing divisions to think out of the box. Enter gamification. Games are widely regarded as being much better at simulating real-life experiences and, therefore, better understanding a prospective client’s or an existing client’s profile. Games are fast becoming a main stay in live events, as they present a unique opportunity for getting to know prospective clients on a much deeper level. These insights can help institutions and organisations create a more memorable brand experience and instil a sense of loyalty.
With such insights and trust, asset managers could identify potentially worrying client behaviour and take remedial action. This benefit continues throughout the investment lifecycle. The current and next generation of investors indicate a need to “live in the moment”. Gamifying the process for such an audience has the added benefit of helping asset managers maintain and potentially grow their asset pools.
Making it fun: how games are changing the marketing efforts of financial institutions
Organisations across the board are now actively investing in introducing a gamification approach to their marketing and client retention strategies. This could reduce the emotional barriers to financial matters and make the activity of investing more engaging. Big companies such as Aviva, Barclays and Lloyds have invested in creating games that help their investors draw never-before-experienced value from association with them. The offerings range from applications for financial health management, credit-rating improvement and network-building opportunities, all wrapped in a gamified package that is easy to interact with and fluid in its operability. As this trend gathers pace, financial institutions and asset and wealth managers would find it prudent to continue to develop such applications to simplify the understanding of complex financial and investment products, as proven by a study undertaken by the Journal of Social Welfare and Management regarding gamification techniques adopted by financial institutions.
Gamifying age-old practices in customer relationship management (CRM) could also have a significant impact on operational efficiency and brand loyalty. However, it is not just prospective clients that should be targeted with such practices. Employees of an organisation can be motivated in equal measure to be invested in their work through the gamification of processes that may have been considered to be non-quantifiable (or less relevant) in relation to their performance.
In a case study conducted by a software giant, one of its clients was facing challenges relating to the adoption of CRM in the organisation. The sales team was somewhat reluctant to use a technical system for their data monitoring, performance tracking and target analysis processes. They wanted to build a CRM solution that would make their salesforce more efficient, while keeping the team motivated and morale high. The solution was a cross-platform application integrated with gamification features to ensure employee engagement and increased usability. The application awarded points to the sales representatives for every action performed and badges for accomplishing specific milestones such as sales closures. The accomplishment of specific tasks was to be rewarded with bonus points or higher levels of awards. Clear metrics were identified to track their progress.
The result of this application was clear. There was a 27% increase in revenue since the introduction of the application and a 30% reduction in lead development costs. Customers were happier, and selling more products to them was made more streamlined and effective through real-time data updates, advanced reporting and customised leaderboards to promote good-natured competition among sales team members.
Gamified applications developed by leading global companies:
- Investorville by the Commonwealth Bank of Australia: Enables users to get insights from simulating buying behaviour in the real estate sector
- App by Aviva Italy: Tracks the driving behaviour of users and notifies them every 300km on how they are driving on a scale of 1 to 10
- Barclaycard Ring by Barclays: A social credit card and community where members receive incentives for sharing suggestions for credit card benefits
- Innovation Market by Lloyds: An application for employees to crowdsource ideas. The best ideas are chosen and implemented
- Money UP by Sun Life Financial: This app was created in Canada to educate customers on retirement and investment decisions through a game that tests their financial knowledge
Capitalising on this new wave
Wealth and asset managers could use gamification for a range of functions in the investor-profiling and decision-making processes. These include detailed profile analysis, assessing risk appetite, encouraging relevant investments, designing customised brand experiences and reinforcing positive investment behaviour.
Using gamification to facilitate client interaction and enhance the client experience for investment decisions and routine check-ins or chats could help establish a more innovative business model. Managers could apply gamification to comparative investment analysis and to create customised webinars and events, compile reward-based crowdsourced data repositories and conduct reward-based performance analysis.
- Design: Design plays a very important role, as about 80% of current applications based on gamification fail purely due to poor design. Aesthetic relevance to contemporary design ideas plays a big role in evoking the necessary response from gamers.
- Functionality: When developing a gamified solution, wealth managers must test extensively for user acceptance and agility. Functionality plays a defining role as well and must be given due importance. Borrowing ideas from proven examples may be a good start.
- Investment: Gamification of a business function or model could be an expensive venture. However, compromising on critical aspects may have a severe impact on adoption and usability. Hence, it must be carefully considered and planned.
- Data security: The importance of data security cannot be stressed enough in today’s context. For wealth managers, this is a very important consideration, as use of this data may be subjected to periodic public scrutiny.
As we enter a world of digitalised solutions and interactions, early adopters of gamification will likely command the attention of future investors. Although gamification is still in a nascent stage of evolution within the financial services sector, it has the potential to become a game changer in a highly saturated space.
How Acuity Knowledge Partners can help
Our Fund Marketing Services division is geared to stay abreast of such changes in the asset and wealth management landscape. We offer a suite of services in the fields of marketing, reporting, competitor analysis, digital marketing, investment analysis and commentary. We combine the knowledge of our qualified subject-matter experts with our expertise in third-party research and analytics tools to provide our clients the necessary insights to make the right decisions. We leverage our fund management specialists’ rich and extensive experience, built over the years through collaboration with leading global investment management firms, to help asset and wealth managers remain agile and adept.
About the Author
Anurag Sikder has over 8 years of experience in producing content for a wide range of industries. As a delivery lead with Acuity, Anurag works with a range of different teams providing qualitative insight for numerous sectors. These insights are produced in the form of reports, research documents, white papers, thought leadership pieces and commentaries. Anurag’s interpersonal skills allow him to work with different professionals, gathering nuanced insights based on their experience and knowledge. This helps refine the content development process and add further value through incorporation of unique perspectives.
Originally published at https://www.acuitykp.com.