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Take the game out of gamification; insert customer engagement

Gamification. Sounds like yet another trendy, buzzy, shot-in-the-dark term people make up to hype the latest hair-brained approach to financial services operations, a term like Big Data, BYOD, or social media.

Wait a minute. Those other words actually have had legs, and are taken seriously by the industry now. So what's this about gamification?

For one thing, it's not about fun and games. Gartner, which has looked into this phenomenon very closely, has about as good a definition as any: "Gamification is the use of game design and game mechanics to engage a target audience to change behaviors, learn new skills, or engage in innovation. The target audience may be customers, employees, or the general public, but first and foremost, they are people with needs and desires who will respond to stimuli."

Yawn. So what?

This is so what. Take a look at a page on Extraco Banks, headquartered in Waco, Texas, where they feature a smiling cartoon fellow inviting the viewer to play the "Bonus Banking Game." It's pretty simple. The viewer is invited to enter information, such as number of debit card swipes a month, amount paid with a debit card per month, bills paid using bill pay a month, and so forth. The game tallies the numbers, and the payoff-literally-could be a reduced fee checking account, higher interest, or even cash back.

 

This is one example of gamification. Another example: The Spanish bank BBVA recently debuted the BBVA Game at the Gamification and Banking Conference in Madrid, Spain-yes, there are even conferences about this now-to generally positive acclaim. In a nutshell, the system allows a visitor to win rewards by directly exchanging points for them or by bidding on auctions. One earns points by logging in, watching videos, performing defined tasks, or doing some defined transfers. Granted, one reviewer said it isn't all that fun, but the prizes are amazing-music downloads, movies, soccer tickets, and even a chance for trips to the United States to attend professional basketball games (a big draw in Spain now).

Another reviewer, who liked the game, had this broader reaction: "I quickly realized...consumers do not enjoy banking. Whether it's lining up at the branch, entering online credentials, or ringing a call center, banking is not fun. Through gamification, financial institutions are looking at ways of increasing engagement, stickiness, and touchpoints with their customers in an innovative, albeit not disruptive, manner...It all comes back to improving customer experience, enhancing customer engagement, and making the touchpoints a bank has with its customers, fun and exciting."

(Speaking about conferences, ABA's National Conference for Community Banks in Orlando this year included a session titled "Gamification: Three steps to foolproof customer (and employee) engagement.")

A lot of serious study has gone into the science of gamification. Researchers at Misys, for example, have looked at it extensively and conclude: "Banks are in a strong position to offer gamification. Financial health is a subject of fundamental importance and yet many people pay little attention to it, finding it dull and uninteresting. By leveraging customer account information, banks can provide real-time data feeds into gamified applications to make personal finance interesting and engage their customers. By encouraging customers to use these sites regularly by employing gamification and social design, banks can develop better relationships, improve marketing analytics, sales, and capital positions."

Gamification works by encouraging users to engage in desired behaviors, by showing a path to mastery, and by taking advantage of our human psychological predisposition to-well-play. A marketer named Peep Laja, writing in the blog Kissmetrics, says gamified systems must:

  Give users motivation to do something (an emotional investment or promise of reward).

  The ability to complete the action.

  A trigger or cue to complete the action.

"The structure is all about timing. If all components don't fire simultaneously then the player will lose interest or become frustrated," Laja says.

Brian Burke, a researcher at Gartner, wrote no less than three reports last year on gamification, and he agrees that there is a right way and many wrong ways to employ gamification.

"Gamification is currently being driven by novelty and hype. Gartner predicts that by 2014, 80% of current gamified applications will fail to meet business objectives primarily because of poor design," Burke says. "The challenge facing project managers and sponsors responsible for gamification initiatives is the lack of game design talent to apply to gamification projects. Poor game design is one of the key failings of many gamified applications today.

"The focus is on the obvious game mechanics, such as points, badges, and leader boards, rather than the more subtle and more important game design elements, such as balancing competition and collaboration, or defining a meaningful game economy. As a result, in many cases, organizations are simply counting points, slapping meaningless badges on activities, and creating gamified applications that are simply not engaging for the target audience. Some organizations are already beginning to cast off poorly designed gamified applications."

Nevertheless, in further research, Burke predicts that more than 70% of the largest global organizations will deploy at least one gamified application by 2014, and that by 2015, more than 50% of organizations that manage innovation processes will gamify those processes.

In similar vein, the technology giant Cisco, commenting specifically on trends in the financial services area, says "Gamification will gradually replace other forms of training, modeling/simulation, and information dissemination, making financial management more accessible, fun, and in line with approaches of younger generations."

It still is tough to find vendors who specialize in bank-related gamified applications. IND Group-Europe, based in Budapest and with offices throughout the continent, offers such an application. Information on their website advocates that, for online banking, gamification can help banks use it as a sales channel and to motivate customers to use more of the bank's services.

Of course, it's a big leap from fad to foundation, but indications are that gamification at least shows promise. As Gartner's Burke says, "As gamification moves from being leveraged by a limited number of leading-edge innovators to becoming more broadly adopted by early adopters, it is important that CIOs and IT leaders understand the underlying principle of gamification and how to apply it within the IT organization."

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Sources used in this article include:

Spanish Bank BBVA Embraces Gamification with Online Game

Bonus Banking Game

Future of Retail Banking: 5-Year Vision

Gamification in banking

Gartner Says by 2014, 80 Percent of Current Gamified Applications Will Fail to Meet Business Objectives Primarily Due to Poor Design

Gartner Says By 2015, More Than 50 Percent of Organizations That Manage Innovation Processes Will Gamify Those Processes

Gartner Predicts Over 70 Percent of Global 2000 Organizations Will Have at Least One Gamified Application by 2014

IND Gamification (Concept) IND's latest innovation

How to Use Gamification for Better Business Results

Gamification: The serious business of fun-what gamification and social media mean for banking

John Ginovsky

John Ginovsky is a contributing editor of Banking Exchange and editor of the publication’s Tech Exchange e-newsletter. For more than two decades he’s written about the commercial banking industry, specializing in its technological side and how it relates to the actual business of banking. In addition to his weekly blogs—"Making Sense of It All"—he contributes fresh, original stories to each Tech Exchange issue based on personal interviews or exclusive contributed pieces. He previously was senior editor for Community Banker magazine (which merged into ABA Banking Journal) and for ABA Banking Journal and was managing editor and staff reporter for ABA’s Bankers News. Email him at jginovsky@sbpub.com.

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