The banking and financial services industry is one of the essential industries in the world. It’s an industry that significantly impacts our economy and our daily lives. As such, it’s no surprise that there’s been a lot of interest in gamification in banking in recent years.
Gamification in the financial industry has the potential to increase annual revenue and average deal size and decrease lead closure time while simultaneously increasing the rate of lead closures.
Furthermore, unlike most other industries, the banking and financial services industry is ripe for gamification.
Why is traditional banking ripe for gamification?
There are several reasons why the financial industry is ripe for integration with gamification. These include:
Customers are accustomed to using numbers to track progress
In our current banking system, customers are used to tracking their progress through numbers. This makes integration with implicit gamification easier since banks can use points and leaderboards to indicate progress to customers.
Competition from neobanks
Traditional banks have to compete with neobanks, offering cheaper services due to significantly low overhead costs and decreased regulation.?
Low bank interest rates?
The falling bank interest rates mean lower profits for banks. As a result, banks have to innovate new cheaper and more engaging approaches for clients.
The cradle to grave mentality
In the past, customers used the same bank from birth to death. This mentality has shifted due to increased mobility and increased banking options and alternatives for customers. As a result, banks need to increase user engagement to get back to the good old days of customer loyalty.
The growth of the millennial customer base
Millennials have taken over as the leading customer group in the United States. Unlike the older generations, millennials require more engagement and fun, even with mundane tasks like banking and accessing financial services.
What changes need to be made in traditional banking and finance to make gamification effective?
Offer more than traditional banking and financial services
Banks need to venture into other services like offering financial literacy training to their customers to increase customer engagement and retention. This will make it easier for customers to utilize sophisticated financial products that financial institutions and experts have monopolized.
Prioritize the customer journey and experience
Banks need to change from a function-first to an experience-based approach. Improving the customer experience will drastically improve customer engagement and loyalty. One way to do this is by introducing the Octalysis Framework into their services and operations.Giving customers a chance to form communities, customize their journeys and have autonomy over what services they want and don’t want could pave the way for gamification in the financial industry.
Transpose cradle to grave approach to digital banking
Traditional banks should adapt their cradle-to-grave mindset even as they venture into digital banking. To achieve this, banks should offer their customers incentives and rewards for continuous engagement. These points can be redeemed for lower interest rates when borrowing and reduced charges.
This will increase the opportunity cost of changing banks, thus increasing customer loyalty and engagement.
Are you interested in learning how your bank or financial institution can increase its customer engagement and loyalty through gamification? Contact us for a consultation today to get started.