Level Up Your Financial Fitness Why Banks Should Tap Into Gamification as a Deposit Strategy

Picture this: a fitness app, but for financial wellness. Even better, imagine a financial fitness app that drives deposit growth while growing the customer’s financial muscles. With gamification, it’s now possible. 

As consumers increasingly seek out convenient ways to save money and achieve financial stability, the incorporation of gamification into mobile banking apps has emerged as a powerful tool. 

The reason is simple. More than half of consumers admit to being addicted to their phones and today’s latest wearables. With mobile app usage accounting for a significant portion of individuals' daily activities, financial institutions can tap into users’ increased screen time but with a more meaningful purpose than, for instance, playing last year’s top downloaded game, Subway Surfers (yep, that’s a real thing). 

Instead, they can leverage the same methods used by gaming apps but with the mission to help consumers become more financially independent. Not only does this align with community banks’ mission of bettering their customers’ financial lives, but it also creates stronger engagement. 

By integrating gamification elements that encourage positive financial behaviors, customers become more engaged. This allows financial institutions to foster increased financial wellness while increasing deposits, like opening and funding a new savings account.  

But what exactly is gamification? 

Understanding Gamification

Gamification entails incorporating gaming elements, such as points and badges, into a platform to drive engagement and motivate users to achieve goals. Humans are naturally inclined to strive for objectives, compete and seek recognition. Gamification taps into these tendencies. 

For banks, gamification involves three key steps: creating goals, setting measurements and applying rewards like badges, points, levels, etc. To maximize engagement, financial institutions must tailor their gamification strategies to specific target audiences and for specific functions rather than applying a one-size-fits-all approach.

That brings us to financial wellness. 

From Gamification to Financial Fitness

Financial wellness tools have gained significant popularity over the last year, driven primarily by consumer demand and the ongoing economic challenges they face. Inflation is still high, and consumers are saving less. In fact, we’ve seen more Americans dip into their savings and retirement accounts this year to pay for everyday expenses. 

Add to this the recent SCOTUS decision to halt student loan forgiveness plans. Loan repayment will resume on August 30 for millions of Americans who may already be struggling. 

Financial wellness is critical, and banks are in a unique position to help, but offering traditional PFM tools fail to provide real guidance. Instead, most PFMs are not far from following customers down a figurative cobblestone path chanting “Shame” every time they buy a $7 coffee versus fund their savings account. This is not King’s Landing. 

And think about it – how encouraging is it to look at a pie chart or receive notifications that point out bad spending habits without any actionable guidance towards better habits? You’d avoid that app like the plague. 

But by integrating gamification into financial wellness, banks can offer meaningful guidance and position themselves as financial coaches, emphasizing personalized goal-setting and measurements that align with each customer's financial journey. 

Similar to fitness apps, financial fitness apps encourage users to take small steps toward improving their financial health and push them to take just a few extra steps. It’s like your Fitbit telling you that you’re only 100 more steps to hitting your weekly goal. A financial fitness app may tell you you’re only $10 away from meeting your monthly savings goal of $100, encouraging you to make healthier financial choices. 

Financial Fitness as a Deposit Growth Strategy

Financial institutions are facing greater pressures to attract and retain deposits, especially as household debt continues to rise. By combining gamification and financial fitness, banks can enhance the customer experience, increase engagement and drive deposit growth. It’s a win-win-win. 

Case studies demonstrate the success of financial fitness apps, with adoption rates of up to 57% among mobile users. These apps have also led to a 20-fold increase in savings account opportunities compared to physical banking locations. As a result, banks can improve their bottom line by increasing their share of wallet and reducing acquisition costs through recommendations from the financial fitness coach. At the same time, they’re doing something good for their customers and helping to better their financial standing.

Unlocking the Potential of Gamification

Companies across all industries are adopting gamification techniques and experiencing conversion rates as high as 700%. Banks can tap into this potential by leveraging their existing digital banking platforms and applying gamification strategies to enhance customer engagement and drive sustainable deposit growth.  

As an example, one bank recently leveraged gamification and saw dramatically higher engagement from its digital banking users, leading to new savings account opportunities. Even more, of the customers that opened a new savings account, 93% of those new accounts were funded, affecting the bottom and top lines of the bank. Ultimately, by integrating gamification into financial wellness initiatives, banks can create a win-win situation, benefiting both the institution and the customer. 

From Turning Customers Into Financial Athletes to Driving Deposits 

Financial wellness apps that incorporate gamification have revolutionized the way individuals engage with their finances. By providing a fun, interactive and personalized experience that leads to positive behaviors like opening a new savings account or saving for emergencies, banks can empower customers to improve their financial health.  Just like a fitness app, users become strong athletes of their finances. 

Moreover, financial institutions can leverage gamification as a powerful tool to drive deposit growth. Customers become more engaged and banks increase opportunities for new account openings that simultaneously increase their share of wallet. 

As the financial landscape evolves, this integration of gamification into existing digital banking platforms is now an essential strategy for banks looking to meet the demands of tech-savvy consumers and position themselves as trusted financial partners. Together, they aim to create a robust ecosystem that fosters financial wellness and propels the global economy toward a brighter, more financially secure future.

In this new era of financial wellness, gamification has proven to be more than just a fleeting trend. It's become a driving force behind a positive shift in consumer behavior and financial outcomes. The vision of turning customers into financial athletes has become a reality, where individuals no longer fear financial challenges but embrace them with enthusiasm and confidence.

The alternative is losing out to the banks and fintechs who understand this and drive this approach forward.

About Author:
Parker Graham is the founder and CEO of Finotta, a provider of embedded fintech for digital banking. For more information, visit www.finotta.com.

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