Are You Playing Games With Your Customers? Part I of a Series on Gamification In Banking.
By TusharChitra on Mar 20, 2013
In many a past opportunity, banks have adopted new technology and have stayed in a virtual boundary of what the opportunity represents. Be it presence on social media or bringing text based banking to mobile phones, banks have been great at adopting the technology and introducing their consumers to it. The unfortunate part is that often non-traditional players have come in and perfected the model, thereby making banks not so very cool in that space anymore.
Gamification is the next new “cool” model emerging for consumer engagement.
The question out there is will banks uptake it, perfect the model and lead the charge or will it be yet another of those ideas which will get perfected outside the bank.
Take a moment and think about it - when was the last time your customers were really interested in, excited about or actually enjoyed an interaction with your bank? Most banks have struggled to understand consumer banking behavior in relation to the next-generation technologies and to drive higher levels of customer engagement.
SMS banking and mobile banking applications become a case-in-point here. While the rising adoption of phones in developing markets represented a potential opportunity to extend banking services to the 'unbanked', SMS banking offers limited extensibility to offer customized solutions to users. Once the targeted user segment graduates to next-generation mobile banking, user engagement withers away. Similarly, most of the mobile banking services today leverage the 3rd-party application eco-system to let users check their balances and transfer funds. However, when you compare these features against the vast array of functionalities in a smartphone today, one can't help but wonder if the banks are still under-utilizing the mobile potential. P2P payments, mobile wallet, NFC, location-based services, digital gift cards, mortgage and auto insurance quotes are some of the many emerging usage cases which the 'digital customer' of today faces day in and day out. Most of the traditional banks have not been able to tie a strong story between these opportunities and their customers.
Such limitation on the part of traditional banks in turn has opened the doors of opportunity for 'new entrants' as well as newer modes of user engagement and retention. The new entrants have proved that banking isn't immune to the pace of technology and that customers are willing to adopt newer ways of banking.
Gamification - a chance for banks to be an early-adopter to tap into customer engagement and retention
As the millennial generation continues to gain traction with modern day technologies, loyalty marketers at banks are struggling to attune their offerings to the changing customer demographics. This is where the gamification comes into picture. Gamification is the fundamental application of game science logic in the product / service engagement strategy to ensure higher levels of sustained user engagement. Points, badges, rewards and leaderboards are applied to drive an incentivized product offering to the user, thereby essentially changing the way in which the user 'engages' with the service. This is not a new concept - Foursquare as been awarding badges and rankings to its users for location check-ins since 2009. The principles of gamification have been adopted by large enterprises in their business strategy. Gartner considers gamification as a critical trend to watch out from CIOs perspective.
How does Gamification help in Customer Engagement ?
The idea of gamification rests on the understanding that individuals tend to see day-to-day workflows as tasks, with an inherent desire to compete, be challenged, operate within the given constraints (rules), win, and be rewarded for their achievements. Such a 'game scenario' has the ability to engross the user at emotional levels, thereby causing deep engagement with the task associated. Gamification in banking parlance implies applying game design thinking to non-game applications such as rewarding customers for watching a bank's online service features tutorial, answering a series of questions and thereby rewarding with loyalty points.
Overall, gamification allows banks to cash in on a nascent trend by getting in the game early and paving the way for future interactions with customers. In the next edition, I will talk about how banks are looking at ways to adopt gamification in their core business model.
I would love to hear about how your institution is looking at applying gamification within your traditional banking processes to engage with customers.
Tushar Chitra is the Senior Director for Product Marketing at Oracle Financial Services. He can be reached at tushar.chitra AT oracle.com