How gamification can be a boon for community banks

To gamify, or not to gamify: that is the question. With analyst predictions anticipating a $37 billion market by 2027, gamification has woven its way into the mainstream fintech agenda, emerging as a chief component of new banking solutions.

What is gamification? It’s the application of gaming elements to make a chore or task more appealing and rewarding. Remember how Candy Crush and Angry Birds had us glued to our phones? Imagine a banking app with a similar interface having the same effect on those who want to improve their financial literacy or who don’t find banking accessible.

While it can be tempting to seek out new offerings that provide these addictive interfaces, experts say that there is a time and a place for gamification.

“Best practices for gamification can be wrapped up in one sentence: How does this make things better for our users?” says Bolun Li, CEO of Austin, Texas-based financial education solution provider Zogo, which offers a gamified product. “It has to be more than a hook, or a retention strategy; gamification has to provide real value for real people.”

“I don’t know of a single community bank that is going out and looking for gamification for the sake of gamification,” says Charles Potts, ICBA executive vice president and chief innovation officer. “Gamification is a tool or process inside of something else to solve a very particular problem that the community bank is trying to address.”

In short, gamification offers a lever to pull in support of a strategic goal, and if banks implement gamification techniques with precision, they can create business wins. For example, research from career portal Zippia shows that companies that use gamification are seven times more profitable than those that do not use gamified elements. In addition, 90% of employees report they are more productive at work when exposed to gamification of tasks, according to a survey by TalentLMS. Gamification can strengthen customer relations and enhance employee engagement, paving the way for a winning community bank product offering.

Gamification for customer engagement

Zogo’s gamified app offers bank customers short educational modules that address topics such as applying for credit, getting insured, saving money and protecting themselves from fraud. With each module, customers can earn pineapples as tokens of achievement. Accumulate enough pineapples, and a gift card awaits like a carrot at the end of the stick.

Li points out that this form of motivation aligns with basic psychology. “Our users already have a huge amount of intrinsic motivation: They want to better themselves and their financial lives,” he says. “But when we add the extrinsic—pineapples in our case—suddenly things start to compound. It’s like, ‘I wanted to do this anyway, and now somebody wants to pay me for it?’ It turns the whole thing into a no-brainer.”

Fun for all ages

As a Zogo client, $566 million-asset Tioga State Bank in Spencer, N.Y., has seen just how motivating this approach can be. With initial plans to leverage the app to engage younger customers, the community bank was surprised to experience a demographically diverse and wide range of participation. In fact, one of the most decorated users is a 70-year-old customer who has completed more than 400 modules. And staff who helped pilot the app reported a positive experience that taught them new personal finance and budgeting information.

“It’s not just about getting pineapples and gift cards. There are some serious topics that need to be discussed. There is finding that balance between making it fun so they do it, but … the whole idea is for them to learn.”

—Brian DeBoyace, Tioga State Bank

But, despite the positive feedback to the game-based approach, Tioga State Bank wanted to ensure that the fun and games translated to knowledge. What it found is that real learning is occurring in the Zogo environment, which was the primary goal.

“With a topic like financial literacy, we can’t say, ‘Just play a game,’” says Brian DeBoyace, senior vice president, regional manager and business development officer for Tioga State Bank. “It’s not just about getting pineapples and gift cards. There are some serious topics that need to be discussed. There is finding that balance between making it fun so they do it, but … the whole idea is for them to learn.”

And learn they do. Zippia indicates that gamification can increase skill retention by 40%. In addition, in one study in the International Journal of Human-Computer Studies, students educated with challenge-based gamification raised their performance by nearly 90% compared with those who only received lectures.

Gamification also offers promise in community bank differentiation. For example, FitnessBank, a division of $788 million-asset Affinity Bank in Covington, Ga., started as a gamified idea born of a smart watch.

“I bought a device that kept track of steps, and I found it very encouraging,” says Ed Cooney, FitnessBank’s chief fitness officer. “Instead of sitting, I found myself exercising more and trying to meet a goal each day, and a light bulb went off about combining that with a financial reward.”

From that concept, FitnessBank launched a program that tracks steps and rewards customer athletes with higher interest rates based on the tier in which their daily steps fall. Hit a monthly average of 12,500 steps a day? That qualifies for a 0.70% interest rate in today’s environment, and 5,000 steps result in a 0.25% rate. Differing options exist for seniors, and the online-only community bank has expanded into swim, cycle and wheelchair tracking options.

“Whether you have $10 or $10 million, you have to earn your rate,” says Cooney. “We make no exceptions on that. Our leaderboard is an incentive. People from all walks of life want to win the gold this month.”

Gamification for employee engagement

That dose of healthy competition extends beyond the customer realm into employee satisfaction. TalentLMS’s gamification survey found that 83% of employees who receive gamified training feel motivated in the work environment. But not all employees are driven by the same factors, so for gamification to work, it needs to address a range of personal motivators—from competition to collection to plain and simple fun.

“The trick with a really well-designed program is to feature something for as many different personalities as possible,” says John Findlay, CEO of gamified learning app LemonadeLXP, an ICBA ThinkTECH Accelerator finalist based in Ottawa, Canada. “It’s about walking a mile in the other person’s shoes and saying, ‘What would somebody find delightful, and what would motivate them?’”

That empathetic approach to employee training pays off. LemonadeLXP customers experience up to an 81% cost savings because their employees are learning outcomes faster, according to the company. In addition, bank clients report a 25% knowledge increase when they implement Lemonade.

Findlay attributes this success to daily microlearning, where employees play through practice. Ultimately, that continued learning loop drives sustainable long-term knowledge outcomes. Having a fun environment to do it in is just the icing on the cake.

“This has been a rough go for people for a couple of years,” he says. “There’s something to be said for adding something fun and positive in people’s lives at this moment in time. Every little thing we can do to help adds up.”

Balancing fun with learning

Yet, experts agree elements of fun must be introduced into learning platforms in a balanced manner for them to be effective, particularly when the training relates to very serious topics.

“Can you create scenarios where people feel like they are winning, benefiting and growing and help shape better choices and defaults for them? That’s the heart of gamification,” says David Shipley, CEO of Beauceron Security, a cybersecurity training platform based in Fredericton, New Brunswick, Canada. “The philosophy we’ve taken is to celebrate the fact that we are human. We teach people that technology is just as awesome and frail as the people that created it. So, we foster a sense of healthy skepticism of technology in combination with growing self-confidence that ‘I can make informed decisions and be in control of the technology I use.’”

Using Beauceron Security’s platform, bank employees can increase their personal risk score by reporting phishes, completing courses and engaging with the platform. In addition, the platform offers a competitive option, complete with a leaderboard, to motivate employees to continue increasing their personal risk score.

First Community Bank and Trust, a $200 million-asset bank in Beecher, Ill., was one of Beauceron Security’s first community bank customers and can attest to the impact the program has had. While First Community Bank and Trust had previously conducted cybersecurity training, instituting the Beauceron program reduced the bank’s phishing email click-through rates from 15%–20% to under 1%.

“It’s a significant improvement over anything we’ve done before,” says Greg Ohlendorf, First Community Bank and Trust president and CEO. “I’ve seen other types of products attempt gamification, and it’s just too gamified. There’s a balance, and Beauceron has found the right side of the fence.”

In addition to the personal risk score, bank employees benefit from the platform’s two-way communication. When they click a button to report a phishing email, it is shared with IT. From there, if it’s a simulated phish, the system congratulates them on accurately identifying it, and if it’s a real one, the IT team follows up both by thanking the employee for catching it and by alerting other staff who may have received it.

According to Ohlendorf, the system works because employees feel encouraged to report suspicious emails. “We celebrate it,” he says. “We handed out gift certificates to local restaurants when we found out we were under 1%. We wanted to reward staff putting in that effort. Everybody gets that we’re all involved in the process. Working together, the result is tremendous and better than I could have possibly expected.”

The future of gamification

With the gamification market expected to continue growing at a rate of 27%, according to Research and Market’s Global Gamification Market 2021–2025 report, gamified employee and customer solutions will be a fixture into the future.

“Community banks should take gamification seriously,” says DeBoyace. “New fintechs are going to be coming out with more gamified products, and you need to look and see how they might fit into your needs.”

The question remains when and how community banks should incorporate these features. Experts agree that gamification for gamification’s sake does not work, but introducing it as an element of a bigger product or solutions strategy will go a long way.

“Gamification is but one more tool in a community bank’s arsenal to improve the quality of education, behavior and performance of your employees or customers,” says Potts. “It’s a tool worth investing in to deliver desired outcomes and improve performance.”