It’s the latest craze sweeping the nation… No, I’m not talking about Fruit Ninja, I’m talking about gamification.
There's a reason "gamification" is the buzzword on the tip of so many tongues these days. It takes ideas and structures from games - the video kind and other types - to guide companies in their quest to affect consumer behavior. So should digital strategists at banks and financial institutions use gamification to meet their business objectives?
We’ll get to that, but for now let's start by clarifying what we're talking about. Forrester defines gamification as:
The insertion of game dynamics and mechanics into non-game activities to drive a desired behavior.
These mechanics come in many shapes & sizes – SCVNGR, a mobile game developer, has a list of more than 40 – but here’s a quick list of four major ones:
· Points. The most basic element of gamification, points is any type of virtual currency – or, in a few cases, IRL currency. Digital strategists at banks & credit card companies have used this tool for years in the form of rewards points.
With all the focus and hype around mobile and payments, one major trend surfaced that has as much impact on financial service companies as anything mobile. In 2011 for the first time, consumers who opened financial products opened more of those products through digital channels (online and mobile) then they opened in a branch.
Every year, Forrester surveys North American consumers and asks them about the products they purchased/opened in the previous 12 months and the channels they used to research and apply for the those products. In 2011 across products including checking, credit cards, mortgages, insurance and investments, 37% of US online adults that opened a product opened that product online with another 2% that opened via mobile. This compares with 36% who applied in a branch. These percentages are up significantly from 2010 where 32% applied online and 40% in a branch. The percentages for Canada are less for digital, but we expect those numbers to continue in the digital direction with the focus Canadian banks are putting on digital sales.
So why the big move? In general more products were opened in 2011. In the US in 2011, 38% of online adults opened a product versus 32% in 2010. Other reasons for the move in digital sales include:
More digital bankers. Survey data has consistently shown that online bankers, mobile bakers and bill payers are more likely to apply through digital channels then those who are not digitally savvy. Those groups continue to grow. In fact, Bank of America announced today that they reached 10 million mobile bankers.
Greater familiarity. Applying for financial products online is no longer a new activity. Most consumers have opened at least one financial product online at this point.