Written by
Benjamin Daniels
9 mins read
How fintech is using app gamification and 3 of the best examples
Between 2020 and February 2021, a staggering 5000 fintech startups opened their doors. The market is booming faster than ever. However, user attention is limited. With all these apps out there the question on the minds of product managers everywhere is “how do we motivate users to stay engaged with our app?” One answer is app gamification. Its popularity is increasing in fintech as case studies show success with boosts in metrics like mobile app engagement and retention.
In this article, let’s look at what gamification is, why fintech is learning to love it, and how the top apps are uplifting retention with it:
- What’s behind the fast growth of fintech apps?
- Here’s why top fintech apps use gamification
- The psychology behind app gamification, how does it work?
- 3 greatest gamification examples from top fintech apps
What’s behind the fast growth of fintech apps?
Consumer confidence in fintech is on the rise, but it’s important to note that this is a new phenomenon. In 2011, just 22% of UK consumers said they would trust a new banking provider. On the other hand, 55% said they’d trust existing banks. And that was shortly after the financial crash!
However, today’s statistics tell a different story. Research from 2020 shows that nearly 2/3 of people use digital banking across the Eurozone. Some countries are hotter markets than others. For example, in the Netherlands, 89% of people use online banking!
So what’s affecting this growth, and will it continue?
Yes, fintech will continue to grow. Impressively so.
The value of fintech is set to rise by over 20% year on year, up from $110 billion in 2020 to nearly $700 billion in 2030. In other words, that means in 2030 the fintech industry will be bigger than the entire GDP of Switzerland!
What are the reasons behind this growth?
Millennials, now aged 24-40, represent a larger share of consumers every year. And as the first generation to grow up with mobile phones and video games, it is no surprise that millennials prefer mobile banking channels, especially compared to their elders.
In addition, the rate of smartphone adoption is growing fast in developing countries, where a rising middle class is lifting incomes and mobile app engagement.
What are the challenges to this growth?
Across the sector, security and privacy are the primary concerns of consumers when asked about fintech. New apps would do well to assuage users of these concerns.
But a major threat to individual app growth is a poor user experience. Day 1 user retention in digital banking is just 30% – meaning 70% of people who download a fintech app will have uninstalled it within 24 hours. Obviously, an engaging and user-friendly design can reduce the chances of this, and gamification is a great way to achieve it.
Here’s why top fintech apps use gamification
Video games, the internet, and fintech. What connects these 3 things? According to research, the answer is millennials. The typical gamer is 34 years old, just as the average age of an internet user is 25-34, and it is the same story for fintech. In short, app gamification is a way to speak to a growing part of the market in a way they understand and enjoy.
That should explain why banks from old to new are so eager to gamify their apps. For example, traditional banks like BBVA are trying to learn from the video game sensation Fortnite! This BBVA article mentions an important fact:
“[BBVA] sees the average customer visiting their branch perhaps ten times a year. They maybe check their banking app 200 times a year.”
Certainly, that statistic tells you how important mobile app engagement is, and that’s why finance is turning to app gamification.
Take Australia’s Commonwealth Bank, which developed a game called Investorville, a property investment simulator. In just 1 year, the bank financed 600 loans with leads generated from the game. That’s just one example of how a fun experience can earn you return users.
The psychology behind app gamification, how does it work?
Simply put, gamification is the use of game-like elements in a non-game context. This can describe a wide range of features from badge reward systems to loyalty programs.
One of the first gamification examples goes back to 2006 when Coca-Cola started using features like loyalty points and prizes as part of its My Coke Rewards program. The campaign retained 20 million lifetime members! Since then, gamification has evolved and found a new life with mobile apps.
However, the core mechanics of how gamification works still remains the same:
- Relationships – People are social creatures and are naturally motivated by competition, collaboration, and relatedness.
- Accomplishment – Achievements like badges give customers goals to strive for. Pro tip: indicating user progress is even more motivating!
- Empowerment – Ultimately, you need to give users control, as well as relevant and personalized rewards that show you value their unique contribution. This could mean positively reinforcing customer actions with perks for instance.
- Unpredictability – People love to explore and stay surprised, that’s why things such as variable rewards are shown to increase customer retention.
- Constraint – Try locking off exclusive features. Science shows the fear of missing out is as motivating as winning!
Did you ever wonder why some apps are so habit-forming? Apps like Facebook have built-in these motivational triggers, so that every time we, for example, go out for dinner, we have to post a picture.
The same goes for why Waze has 130 million monthly active users or why Duolingo is way better than school. By playing with common human psychology, app gamification taps into our inner motivation and enjoyment and provides a boost to mobile app engagement.
3 greatest gamification examples from top fintech apps
According to Fortune Business Insights, the banking industry is one of the biggest markets for gamification. Given that, there are plenty of fantastic gamification examples from fintech apps that are showing the way forward:
A Revolut cashback campaign with a basket of benefits
Research shows that 70% of those aged 24-42 would spend more if they were to receive at least 5% instant cashback. So how about 50%? Over a period of 6 months, Revolut users were given 6 days to benefit from half price cashback on purchases at the Notes Coffee café chain in London. The results were incredible!
- A 590% uplift in the number of transactions per user vs Non-Perks users.
- A 625% boost to incremental sales over the 6 month campaign period.
- A 15% user retention rate, improving visit repetition, and winning back lost customers.
Those figures are huge. Of course, putting 15% next to 625% seems small, but that 15% retention rate is over a 6 month period. In contrast to the average 15% that is the Day 7 user retention in digital banking. Essentially, Revolut found out how to keep customers for 6 months longer than most apps do for 7 days!
How Axis Bank pioneered Augmented Reality in banking apps
The Indian-based Axis bank is the first bank in India, and perhaps the world, to use augmented reality in its banking app. After the global success of Pokémon GO, this bank decided to find a use case for AR in banking.
Their banking app allows users to look around and see offers pop up. Along with Pingpay users can instantly pay and get discounts on various items.
Amit Sethi, chief information officer at Axis Bank wants to continue down the path of gamification saying “this is just a first step to gamification. Soon we’ll be adding points, loyalty systems, and more.”
Additionally, the bank puts a high priority on target push notifications to keep users engaged. Micro-segmentation and dynamic reminders helped them engage 23% of users on their website and acquire 36% positive leads for the bank to invest in.
Shine shows that you can boost user retention with gamified onboarding
According to a report by ABBYY, 90% of companies lose potential prospects during the digital onboarding process. On the other hand, with a gamified onboarding process, French fintech Shine boasts an onboarding conversion rate of 80%. How so? Easy –
- Progress bars let the user know how long is left.
- One screen, one action – they keep it simple.
- A big call-to-action button that just looks so clickable.
- Digital confetti to celebrate free, unlimited accounts.
- Most importantly, the process is short!
Of course, as a bank, onboarding will always be there because of legal requirements. But, Shine shows that it doesn’t need to put customers off. Following these tips will make the onboarding process quicker, easier, and more fun and let customers try your app faster. This is important because the features of your app are where customer value is created!
Recap
Here’s a challenge, how do you compete with the 5000 new fintech startups that opened doors just last year? Or the decrease in general attention spans?
One answer is app gamification. Its popularity is increasing in fintech as case studies show success with boosts to metrics like mobile app engagement and retention.
What you should know about fintech today
Consumer confidence in fintech is on the rise. In 2011, just 17% of UK consumers said they would trust a mobile banking provider. Today, research from 2020 shows that nearly 2/3 of people use digital banking across the Eurozone!
Will fintech continue to grow? Yes, impressively so.
The value of fintech is set to rise by over 20% annually, up from $110 billion in 2020 to nearly $700 billion in 2030. In other words, fintech will be richer than all of Switzerland!
What are the reasons behind this growth?
Millennials, aged 24-40, represent a larger share of consumers every year. Growing up with video games and mobiles, it is no surprise that millennials prefer mobile banking. In addition, the rate of smartphone adoption is growing fast in developing countries.
What are the challenges to this growth?
Across the sector, security and privacy are the primary concerns of consumers when asked about fintech. To individual apps, though, a challenge is a poor user experience. Day 1 user retention in digital banking is just 30% – meaning 70% of people who download a fintech app will have uninstalled it within 24 hours. To be sure, an engaging and user-friendly design can reduce the chances of this, and gamification is the solution.
Why top fintech apps use gamification
In short, the audiences align. The typical gamer is 34 years old and most fintech users are 25-34. So, app gamification is a language this demographic understands and enjoys.
Banks both old and new see this, to the point that traditional banks like BBVA are trying to learn from the video game Fortnite! The BBVA article mentions something important:
“[BBVA] sees the average customer visiting their branch perhaps ten times a year. They maybe check their banking app 200 times a year.”
That describes how important mobile app engagement is, and it’s why finance is turning to gamification. That’s 200 opportunities to create a relationship with your customer!
The psychology behind gamification, how does it work?
Simply put, app gamification is the use of game-like elements in a non-game context. One of the first gamification examples goes back to 2006 when Coca-Cola started using features like loyalty points and prizes as part of its rewards program. The campaign retained 20 million lifetime members! Even with mobile apps, the concept is the same:
- Relationships. People are naturally social!
- Accomplishment. Achievements like badges give customers goals to strive for.
- Empowerment. Give users control and reward their unique contribution.
- Unpredictability. People love to explore and stay surprised.
- Constraint. Lock-off features. Studies show that missing out is motivating!
3 greatest gamification examples from top fintech apps
A Revolut cashback campaign with a basket of benefits
Over 6 months, Revolut users were given 6 days to benefit from half-price cashback on purchases at the Notes Coffee café chain in London. The results were incredible!
- A 590% uplift in the number of transactions per user vs Non-Perks users.
- A 625% boost to incremental sales over the 6 month campaign period.
- A 15% user retention rate, improving visit repetition.
Compare that retention rate to the average 15% Day 7 user retention in digital banking. Essentially, Revolut kept customers for 6 months longer than most apps do for 7 days!
How Axis Bank pioneered Augmented Reality in banking apps
Their banking app allows users to look around and see offers pop up. Along with Pingpay users can instantly pay and get discounts on various items while walking around India! The chief technology officer says more is about to come!
Shine shows that you can boost user retention with gamified onboarding
According to ABBY, 90% of companies lose potential prospects during the digital onboarding process and end up opening an account. On the other hand, with a gamified onboarding process, French fintech Shine boasts a rate of 80%. How so? Easy –
- Progress bars let the user know how long is left.
- One screen, one action – they keep it simple.
- A big call-to-action button that just looks so clickable.
- Digital confetti to celebrate free, unlimited accounts.
- Most importantly, the process is short!
Following these tips will make the onboarding process quicker, easier, and more fun and let customers find out faster the customer value!