By Marilyn Kennedy Melia
Customers’ money management skills and use of products are enhanced by gamification.
A buzzword that’s risen in popularity along with the growth of the online world, gamification is awkward and difficult to pronounce.
The clumsy moniker belies its meaning: Complex subjects and difficult-to-cultivate behaviors can more easily be mastered through online games.
In one sense, games have been long used in marketing—think of airline points, for example, said Vikram Parekh, vice president for savings experiences at USAA Federal Savings Bank. But gamification typically refers to online programs that provide perks, which may be tangible or intangible. Indeed, something as simple as a congratulatory text message for maintaining a certain checking balance qualifies as a type of gamification.
Banking, of course, is related to a whole host of complicated subjects and habits requiring discipline and resolve. Just ask the proverbial man on the street to explain loan amortization or if he has exciting plans to open a certificate of deposit soon.
That puts gamification right in a bank marketer’s wheelhouse. Whether the goal is to spur customers’ use of a particular product, or see front-line staffers enthusiastically and accurately explain bank offerings, a gamification strategy may be key.
Still, gamification in banking is just “beginning to gain momentum,” said Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy and Research. Given the varied aspects of personal finance and bank products, the gamification possibilities are seemingly endless, he added.
Simple, but effective, ways to play.
One of the first financial institutions to use gamification—about a decade ago—PNC took on the basic tenet that it’s difficult to save for a future goal when there are so many tempting short-term gratifications begging for our money. That’s why the bank developed “Punch the Pig,” now part of a broader Virtual Wallet.
Whenever a customer is online, he has the opportunity to click a pig and direct money to one of any number of accounts tagged with a goal, according to Mike Ley, digital team head at PNC. The sound and sight of the pig moving money provides instant gratification towards a long-term goal, Ley explained.
Users skew towards younger, millennial customers, Ley added. “We’re constantly conducting customer research” to increase usage.
At the end of 2016, Wells Fargo introduced a similar concept, with a Daily Change app whereby customers find ways to spend less—by brown bagging lunch, for example. The app then sends notices reminding them to transfer certain amounts to savings. A progress bar tracks movement towards savings goals, and sends congratulatory notices.
In an email, Jonathan Hartsell, Wells Fargo vice president, reported, “We’ve seen good engagement and consistent users.” He added, “The average user is increasing their daily transfer amount to more than the amount suggested by the app.”
Can small players get in the game?
“It is a decent amount of work” to develop and maintain a feature like Virtual Wallet, said PNC’s Ley.
That begs the question of whether a small institution can afford to provide gamification.
It may actually be easier for a smaller institution, USAA’s Parekh argued. For example, smaller banks have limited risk if a game embedded in an app that provides other services malfunctions and brings down the entire app for a day. “People won’t bat an eye if it’s a small bank,” Parekh said, “but when millions use an app, its’ a big problem.”
“Smaller banks can compare developing a game to website development,” said Bjorn Billhardt, CEO of Abilitie, a provider of gamification for training. “You can buy an off-the-shelf template,” he explained, “or hire a firm to create [a more costly]strategy.”
Billhardt recommends that marketing officers study the websites of other banks, and talk with gamification vendors to research options.
Daniel Rubenstein, chief revenue officer for JohnRyan, a firm specializing in digital signage, predicts that smaller institutions will be increasingly partnering with fintech companies offering gamification apps.
Right now, about 60 financial institutions are offering the SaveUp program, according to Paul Burt, executive chairman of the program, which awards customers points for every dollar they pay on linked accounts.
Points are also awarded when customers complete online financial literacy presentations. Then, SaveUp users “spend” points to enter lottery-like games.
Burt says that the program is licensed as a sweepstakes or lottery provider in all 50 states, and his attorneys don’t anticipate compliance issues.
A similar concept, prize-linked savings accounts were made legal by the 2014 American Savings Promotions Act. That said, the 2014 law doesn’t preempt state laws in place that may prohibit state-chartered banks from offering them, according to Toni Cannady of the American Bankers Association.
Is the game a winner?
Recently, USAA Bank completed a pilot program called Savings Coach, which featured a cartoon-like eagle and lauded users for savings behaviors.
While gamification is effective for providing the instant gratification of an affirming message, it’s still an open question as to whether customers will develop long-term financial habits, Parekh cautioned. “If you remind people every day that they are saving,” he said, “they might get heady and when they see [a certain balance]go out and impulsively spend it.”
Currently, USAA is exploring other gamification options—like whether a funny message will attract customers—while still ensuring that the humor is aligned with the company’s image.
Gamification strategies and results can impact many bank areas, Parekh added. As a result, marketing, finance, risk, and technological professionals are all involved in the creation and monitoring of a game.
There’s also a role for gamification in sparking branch use, said JohnRyan’s Rubenstein. He envisions, for example, in-branch touch screen kiosks that customers can use to see their account activity, and how it relates to their goals.
Making employee training more fun.
It’s not just customers who find banking products and personal finance difficult to master. It’s an even tougher job for the front-line employees who must simultaneously consider what customers are conveying with answers pertinent to products, said Lisa Van Damme, solution architect with Sweetrush, a gamification training provider.
Sweetrush recently worked on a game for a wealth management firm that simulated customer conversations, and provided different scenarios that customer representatives could use, with some paths allowing a “winning” strategy. For instance, a background that shifts from red to blue, signaling a customer’s anger is tamped down, or resolving an issue within a certain time, are all ways for employees to conquer the challenge.
Depending on the level of complexity, says Van Damme, a gamification training program can cost anywhere from about $15,000 to more than $50,000.
Moreover, some pre-packaged training programs may fit a smaller institution’s needs.
Marilyn Kennedy Melia is a banking and personal finance writer based in Chicago. Email: [email protected].