MARCH 20, 2023
14 min read
Gamification is a part of ever so many digital growth strategies that now it is seen more like an ultimate way to enhance customer engagement.
In this article, I will focus on the benefits gamification brings to financial institutions and other businesses in the niche, especially those that are undergoing the digital transformation. So, let’s find out how to implement entertaining elements into the everyday routine tasks.
What is gamification
First thing first, let’s get straight to the point of gamification definition. Gamification is a strategy for implementation of game elements into different non-gaming software and domains. A good example is Duolingo, an educational platform with gaming elements that encourages users to learn via a points-earning system. For each task and question done correctly, users are issued points which makes the experience more immersive.
The gamification eLearning platform generated more than USD 369.5 million in 2022. And something similar can be used for financial literacy platforms.
Enhanced engagement achieved by gamification in education is immaculate, since according to Finances Online, 67% of students feel more motivated by using gamified platforms rather than usual study resources. Additionally, the gamification market by itself is projected to amount to USD 37 billion by 2027. But what about gamification of fintech?
One of the gamification examples recently came into the light; it’s a Ukrainian-based full-online mobile banking platform Monobank. This digital bank has different gaming elements, such as:
- awarding badges to users as a reward for using the bank’s cards
- shaking the phone in order to complete peer-to-peer transactions
- hidden mini-games within the app
- various animated elements for different actions
Monobank has acquired over 6m customers since 2017 and generates around USD 29 million annually. More so, recently the bank launched its Poland-oriented department, Stereo by Mono.
So, with the gamification meaning being taken out of the way, let’s find out the value of gamification in the finance domain. It is capable of bringing you higher revenues and customer retention rate, and other benefits that I will cover more in the next paragraph.
The Benefits of Gamification for Financial Apps
As we’ve mentioned before, the many benefits of gamification pivot around engagement and revenue uprisal. This isn’t exclusively about customers, it also concerns the employees. According to Review 42, 72% of surveyed employees stated that gamification motivates them to work harder. So, when we’re looking at the gamification benefits take into account that it covers your company as a whole and not only sales or UI pipeline.
Overall, gamification can do a lot for your business. Among its benefits are:
- Drive up customer acquisition. Being as entertaining as gamification can be exceptionally fruitful in terms of customer acquisition as it brings more attention towards your company. Say, you use an application that is extremely addictive and it makes you think about the internal achievements for a big part of your leisure time. In this case, you will most likely tell your friends and family about it, write a review on social media platforms, and do a whole lot to promote it. This will contribute to the applications’ audience growth.
- Enhance customer satisfaction and retention. It is no wonder that our brains are fueled by rewards, especially for small and simple tasks. Gamification acts as a catalyst, making your customers’ brains release dopamine for completing those simple tasks and seeing the immediate progress. This overall contributes to customer satisfaction and as a result makes your audience more loyal.
- Enhance revenue generation. As a result of more loyal customers and improved customer acquisition process, the business will generate higher revenue.
- Lower marketing expenses. Gamification can contribute to lowering marketing costs since it enables users to spread the word about your product on their social media accounts.
- Improve employee engagement and productivity. As we’ve mentioned above, the gamification benefits drastically affect the employee engagement and efficiency of your staff’s work. This can be achieved by incorporation of gaming elements into the routine like internal currencies or long service bonuses. Or, gamification can also drastically improve your staff’s training. Overall, according to TalentLMS, over 87% of employees feel more socially connected if the game elements are included in their workflow.
- Differentiate your financial app from competitors. Gamification can act as a competitive leverage as it is capable of making your fintech software stand out on the crowded market. Unique elements such as gamification badges or mascots contribute to the brand development strategy and interesting features like gamified tracking systems or internal currency to buy premium products and services make your app recognizable.
As above mentioned benefits come into play, you’ll get a unique way to become not only recognisable but preferable company for your customers. But as good as it sounds, there is a question that gamification evokes. How can you implement it into your company’s workflow? I will cover it in the next paragraph.
Best business practices for gamification adoption in Financial Apps
So, to find the best business practices for gamification adoption, we’ve consulted with DashDevs specialists. Here is what they’ve claimed to be fruitful and productive among other ideas on gamification incorporation in the fintech domain.
- Streak-based reward system. The notion of streaks stands behind the simple games successes. It works simple enough; a player has to log in systematically every day without breaking the streak and then the game rewards the player for consistency and loyalty. Streak-based reward system can be the first gamification practice you incorporate into your workflow, capturing the attention of your customers and making them log in or perform other desired tasks systematically.
- Drive referrals and shares. Focus on making your application viral. Maybe, award users for sharing the software via their social media pages or allow them to tie in their Instagram, Google, or other social media pages during registration of the savings account. Gamification can be a crucial addition to marketing campaigns as it makes the promotion self-sufficient.
- Use gamification training and employee engagement models. As I’ve mentioned before, your employees can be more focused and motivated with gamification. Try adding more gamified elements like internal currency, rewards, or bonuses to their everyday workflow. This will change the way your people see the company and the job they do there, making a positive impact on both their productivity and mental health.
- Add badges and make them valuable. Make those badges unique or hard to get. Turn them into achievements your customers or employees can brag about. Allow them to share their badges on various social media platforms, but keep them optional. You also can use hidden games that users can unlock after performing some actions within the app. This will contribute to enhanced focus and the desire to explore the software more. Don’t force the gamification rather make it a pleasant addition.
- Add value to user experience. When you decide upon adding gamification features, you should be certain about why you’re adding each of the chosen elements. Don’t clutter the UI or force the experience upon users. Try to make the experience entertaining and memorable by figuring out how each of the gaming elements contributes towards your end-goal.
Tips for gamification adoption
So, how can you ease the gamification adoption process both for your business and your customers? First of all, don’t force it. Certain features might work well for your unique case while others won’t deliver the desired effect. Here are some tips that I gathered and broke them into categories for your convenience.
Gamification strategy that is tailored to your target audience and business goals
First, start with defining your target audience. You also need to understand what motivates them, and what types of games they might find engaging.
Second – identify the business goals. Each gaming feature must correspond to an end-goal, otherwise it won’t bring the desired value.
Then you need to choose what gamification features you want to implement. Note that some of them might be harder to execute then others, for example it’s easier to implement a streak-reward system than internal currency based on crypto.
And, last but not least, stay agile. With testing comes feedback, and you might face the need to adapt and change to the market demand. If you’re willing to do so, the strategy will be successful.
User experience that maximizes engagement and retention
Understand your users: Conduct user research, analyze user data, and gather feedback from your target audience.
Provide clear goals and feedback: Clearly define the goals and objectives of your gamified experience and provide feedback to users on their progress towards those goals. This can be done through progress bars, pop-ups, or other visual indicators.
Make it social: Integrate social elements into your gamified experience to encourage competition, collaboration, and social interaction. This can be done through leaderboards, challenges, or social sharing features.
When to implement gamification features
There are several factors that determine when to implement gamification features. The core of them, in DashDevs opinion, are these three pillars:
- User motivation: Consider whether gamification features would motivate your users to perform specific actions or behaviors.
- Budget and resources: Creating a gamified experience can require significant time, effort, and resources, so it’s important to weigh the costs and benefits and don’t bite more than you can chew.
- User feedback: Gather feedback from your users to identify whether gamification features would be well-received. User feedback can provide valuable insights into what types of gamification features your users would find engaging and motivating.
Overall, it is safe to say that the best time for gamification implementation is after you learned the market demand for your product. Whether you want to see gamification in business from the start or you’re ready to update it later, it’s up to you.
Build a business case for gamification to your executive team
Gather data: Gather data on your current performance metrics and identify areas where gamification could make a difference. This might include metrics such as user engagement, conversion rates, customer satisfaction, or employee performance.
Research: Research successful examples of gamification in your industry and how they have achieved their business goals.
Develop a plan: Develop a plan for how gamification could be implemented in your organization, including what specific features and mechanics would be used, and how it would be integrated with existing systems and processes.
Estimate costs and ROI: Estimate the costs of implementing gamification and the potential return on investment (ROI). This should include both tangible benefits (such as increased revenue) and intangible benefits (such as improved customer loyalty).
Address objections: Address any objections or concerns that your executive team may have about gamification. This might include concerns about cost, effectiveness, or potential negative impacts.
Create a presentation: Create a presentation that outlines your business case for gamification, including the goals, data, plan, costs, and ROI, and present it to your executive team.
Mitigate potential risks and challenges of incorporating gamification in your financial app
While the gamification approach in fintech comes with numerous benefits, it still has risks. Here are some of them and the ways of risk mitigation.
Security risks: Gamification features may require users to share sensitive financial information, so it is important to ensure that your app is secure and uses encryption to protect user data.
Regulatory compliance: Financial apps are subject to strict regulatory requirements, and gamification features may need to comply with these regulations. Ensure that they comply with regulations such as GDPR, PCI DSS, and other applicable laws.
Ethical concerns: Gamification can be a powerful motivator, but it is important to ensure that the incentives and rewards you offer are ethical and do not encourage users to take on too much risk or engage in harmful behaviors.
User feedback: Regularly gather feedback from your users to identify any potential negative impacts of gamification features and adjust them accordingly.
How To Increase Gamification Effectiveness in the Financial Apps
In financial gamification apps, this strategy can be used to encourage users to save money, invest wisely, and make better financial decisions. But more so, gamification can pump up the revenue, contribute to the staff training, and increase productivity. If you are looking forward to reaping the benefits of fintech gamification, here are some tips for increasing its effectiveness.
Understanding user behavior and motivation
User behavior and motivation can crucially affect the gamification features and overall customer experience you should aim for. Here are some of the ideas I use in order to achieve better configuration with users’ demand.
- Define User Personas. User personas are fictional representations of your target audience. They are based on real user data and provide a deeper understanding of customers’ behavior and motivation. Thus, you can create personalized gamification experiences that are tailored to the users’ specific needs and preferences.
- Analyze User Data. It can help you understand how users interact with your gamification elements. Use analytics tools to track users’ financial habits and identify patterns and trends. This way, you’ll make data-driven decisions about your gamification strategy.
- Use Behavioral Economics Principles. Behavioral economics is the study of how people make decisions. It can be applied to gamification by using principles like loss aversion, social proof, and scarcity to motivate users. For example, using a progress bar to show users how close they are to reaching their savings goal can create a sense of loss aversion, encouraging them to save more.
- Apply Game Design Principles. Game design principles like feedback, challenge, and rewards can be applied to gamification to create a more engaging and motivating experience for users. For example, providing feedback on a user’s progress towards a goal can help them feel a sense of accomplishment and motivate them to continue.
Choosing the right gamification mechanics for your financial app
As we’ve barely scratched the surface of behavioral economics principles and gamification mechanics, it’s important to take a more detailed look at them. There are numerous options and features you can use, but I present to you some of DashDevs favorites.
- Loss aversion. This mechanic effectively interacts with the fear of losing. People are afraid to lose a whole lot of things, from bonus points to earned progress. This might motivate them to take the desired actions and use your gamification app more often.
- Mystery box. Leave some space for curiosity and surprises. Allow people to figure something out on your own in the app, or add surprise bonuses. They will always be seen as more valuable than others since people are eager to get them.
- Storytelling. Personalized experience is great, but people like things they can relate to. Tell stories with your gamification features, use comic elements or allow people to share their experiences in storytelling manner.
- Scarcity. Remember how you used to treasure rare collective items when you were a kid? Scarcity mechanics works the same way, just make something rare and people will want it.
- Time dependent features. Add limited collections, bonuses, coupons, and discounts connected to a certain period of time. This will motivate people to get those limited edition things even if initially they didn’t think they need it.
- Fair competition. People love to compete and boast about their achievements. Give them something to achieve and make it a competition. This will motivate them to be better than everyone else, and as a result–use your fintechs more.
- Easter eggs. Seeing something you know and like in different applications, especially in those serious enough as fintechs, always makes one’s heart warm up. But be cautious about easter eggs; conduct high-quality customer research to find out what your target audience is really passionate about.
- Challenges. Like streaks, you may add to your applications more challenges. This will prompt people to do more to win, And if you will pump those challenges up with rare content, you will most likely go viral.
- Customization. This mechanic is heavily incorporated by banking apps in a way of credit card customization. Let your audience create something unique and expressive, they will love it.
- Badges. As we’ve mentioned already, badges can be effective. They provide a sense of completion and achievement, while making the users’ profile more unique and status-showing.
Designing a user experience that maximizes engagement and retention
Incorporate the design choices that are used in real games in order to maximize the engagement. Some of the options might include:
- One theme. Games often use one theme and tell a well-put story. Start with this, unwrapping the idea of your application slowly before the customers’ eyes.
- Leaderboards. It is important to learn how far you can go with gamification. If you’re ready for competition within your application, add a leaderboard to boost user engagement.
- Timers. Time pressure might be a great motivator. If your application allows you to include things like timers or countdown, they might work just fine to help your customers stay interested in your services.
- Avatars. One more to contribute to the gamification mechanics. In fintech, avatars can help customize the user profile and be more meaningful, allowing other users to easily define where the payment came from.
Measuring the impact and ROI of your gamification strategy and altering it accordingly
In general, gamification isn’t as different from other technologies and strategies, so the workflow will be similar.
First, you identify the KPI to measure the gamification’s effectiveness and ROI. Start with customer retention rate, direct and indirect costs, direct and indirect revenue, and average session duration.
Then, you gather the initial data if you have a working gamification software or prototype, and set realistic goals taking the initial parameters into account.
When you have the information according to those KPIs, you might want to start a test run before the implementation. Compare the results with once you identified as optimal, and this should give you an overall impression of how good gamification is for your fintech business.
So, as profitable as gamification is, it is important to know how to implement it and how to measure its effectiveness, just like with any other new strategy. And despite having the greatest potential to attract new customers to your fintech company, you still need a reliable technical partner to go through this update.
If you have any doubts, hesitations, or questions – contact DashDevs and cast them all away. We can provide you with a consultation to help you figure out what you need and how to get it.
Can gamification improve financial behavior?
In short, yes. By incorporating gamification mechanics like points, badges, leaderboards, and challenges, financial apps can motivate users to engage with their finances, learn more about financial management, and make better financial decisions. Gamification can create a sense of achievement, provide immediate feedback, and make financial management more enjoyable and accessible to users.
What are the benefits of gamification in fintech?
- Increased user engagement
- Increased employee engagement
- Higher staff productivity
- Higher customer retention rate
- Improved staff training
- Competitive advantage
- Enhanced customer acquisition