How better experiences will be the most powerful move for banks
The sudden uptick in-app engagement and digital adoption due to the Covid-19 pandemic forced banks to quickly adapt in a world with few physical interactions. With digital transactions up by 20%, banks needed to step up their game to create a better digital customer experience.
Customers prefer digital. In fact, digital banking customers are more loyal to their primary bank, cost less to serve, and are more profitable! App engagement for banking apps is expected to rise to 71% by 2024.
So how can banks create digital experiences that stand out and create loyal customers at the same time? Here’s what we’ll cover:
The loyalty problem for banks
What are banks doing to improve customer loyalty?
Gamification for apps & how it fuels customer loyalty
Banks that have crushed it with gamification
A gamification tool that boosts app engagement & customer loyalty
📉 The loyalty problem for banks
Simple and digital experiences help direct banks outperform traditional banks. Still, technology companies like PayPal, Apple Pay, or Google Pay have a 54% higher consumer trust according to Customer Loyalty research in Banking by management consultant Bain & Company.
This study by consulting company Accenture found the average customer churn rate in banking rests around 11%. The rates are even higher for first-year customers, who churn at a rate of 20-25%. A staggering half of all churned customers stated dissatisfaction with their experiences or service as the number one reason.
👀 What are banks doing to improve customer loyalty?
It’s clear banks need to reinvent their digital experience if they want to build a loyal customer base. As tech firms explore financial services, big banks can fight back by focusing on a frictionless customer experience.
Bain & Company found customers want a fun and engaging experience that simplifies their banking, saves time, and reduces anxiety. One thing you can do is deliver emotional elements of value. Appealing to emotions increases NPS (Net Promotor Score) by 150%.
Almost all banks have loyalty programs in place. However, consulting firm KPMG found the effectiveness of traditional loyalty programs in banks limited. 61% of consumers said it was very important to ‘find better ways to reward loyal customers’. Another 57% wanted better online banking and easier application processes.
Some challenger banks like Revolut and Monzo differentiate themselves with gamification. The latter of which has gained over half a million users without any physical branch. A popular badge reward system and a vibrant chat forum keep the mobile fintech app close to their customers.
What is gamification you ask? Keep on reading!
🚀 Gamification for apps & how it fuels customer loyalty
What is gamification?
Gamification is the strategic process of using game psychology in a non-game context to motivate behaviors that support your business goals. By rewarding users for their active participation, you can improve app engagement and drive behaviors such as conversions.
How does gamification work?
A great gamified experience triggers internal desires and keeps customers engaged through game elements and experiences. For instance; progress bars or badge reward systems can trigger the desire for accomplishment and boost user activity.
How can banks use gamification for apps?
Banks can use gamification to improve app engagement and drive customer loyalty. It’s a great way to slash churn and differentiate your company. Financial companies using gamification can outpace competitors in revenue, deal size, and conversion rates.
Want to get a quick introduction to gamification? Check out our What is Gamification page and get up to speed!
🏆 Banks that have crushed it with gamification
BBVA’s 100,000 loyal customers through smart rewards
BBVA, the leading digital bank in Spain created a gamification strategy to drive customer loyalty. As part of their strategy, they launched the BBVA Game, a web app with app tutorials and explanations on how to pay taxes and do transactions online.
Customers can earn points by completing challenges and redeem them for music downloads, movies, smartphones, tickets for the La Liga football league, or even auctions. After only 6 months the game had over 100,000 users and its users showed an 18% higher satisfaction rate.
Extraco Banks’ 7X higher conversion rates
Extraco Banks is the largest financial institution with headquarters in Texas, with over 1.2 billion dollars in revenue and over 140,000 customers. When they wanted to remove free checking accounts, the bank used gamification for apps to ease into the transition.
Customers got a series of questions and then got personalized tips from James, a character in the game, on how they could reduce or even eliminate their monthly fees by doing more online banking. The app generated a 7X higher conversion rate and shows how gamification can guide customer behaviors to brand loyalty.
🔌 A gamification tool that boosts app engagement & customer loyalty
StriveCloud makes game elements come to life with an easy-to-use plug-in gamification tool. It’s a great way to make your experience fun and engaging to customers. Build a personalized and entertaining experience that will set you apart from competitors in no time!
Here’s how StriveCloud’s plug-in gamification tool works:
#1 Simply plug-in the gamification tool to your web or mobile apps and it will link to your customer data and gamify it.
#2 Based on app goals you can set personalized challenges and milestones to trigger user actions to support them.
#3 You can then reward users for active participation and behaviors that support your business goals.
#4 Set behavior-triggered in-app messages, contextual notifications, and personalized emails to re-engage your users.
#5 Keep users wanting more with visual feedback like progress bars, leveling systems & coins collection.
You can control the gamified experience from one Control Panel to deliver a great customer experience across platforms.
🤓 Key takeaways
With digital adoption on the rise, and app engagement higher than ever, banks had to quickly adapt to the digital-only approach. And for good reason! Digital banking customers are more loyal to their primary bank, cost less to serve, and have a higher lifetime value.
That said, here are the main learnings from the article:
Customers prefer digital
It’s true. Customers prefer digital experiences because it saves them time and is often more pleasant than having to schedule a meeting with your bank, waiting in the lobby, and so on.
Loyalty programs need to be reinvented
61% of consumers find it very important that loyalty programs in banks need to be reinvented, whilst another 23% find it important that banks find new ways to reward loyal customers.
Banks need to win back consumer trust
With tech firms taking on the financial industry banks have to face a new kind of competitor. Digital companies have a 54% higher trust than traditional banks. However, some banks have built great digital experiences to fight this.
True value comes from emotional experiences
Emotional elements improve NPS by 1.5X more than functional elements. Gamification for apps plays on these deep emotional desires to keep users active and engaged.
Gamification sets you apart from the competition
There’s no better way to stand out than creating an experience that sticks, and people actively seek out. That’s what the power of gamification can do for you if implemented correctly.
Figuring out your own gamification strategy? Get a free workshop to see how gamification could work for you!