Wednesday, September 23, 2020

The Gamification of Fintech

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Almost every aspect of our lives today can be supported by technology. From the Internet of Things (IoT) enhancing our gaming experiences, to wearable medical devices that share information directly with physicians. Our digital age has not just connected us to helpful devices, but also brought the world closer together. 

One of the growing trends in supportive technology is gamification, which taps into platforms that replicate the sense of enjoyment and user-friendliness we get from playing video games. It has a presence everywhere from education to corporate environments. In recent years, even financial technology has begun to embrace gamification tools across a variety of platforms, encouraging our individual financial stability and affecting world markets.  

We’ll take a look at a few of the key areas in which gamification is proving popular in financial industries. How has this changed the way we approach finance from personal, professional, and infrastructural perspectives?  

Personal Finance

It’s probably safe to say that personal finance isn’t a source of fun for most people. However, it is something that most of us need to put some energy into in order to maintain both our present liquidity and future stability. There are tools available to us that can make this responsibility easier, and many financial institutions have begun offering apps that have gamified elements — sometimes from a user experience (UX) perspective, or others that provide rewards for actions.  

Most platforms aim to apply the principles of games to non-game contexts, but there are those that use gaming more directly. For example, the Blast app essentially “charges” users for their video game habit, transferring a small amount of money from their checking account into a savings account each time they play. This kind of app capitalizes on the idea that many gamers may have small amounts of disposable income that can benefit from long term accumulation, but they may not have the financial understanding to undertake this, or even the time and inclination to do so.  

Aside from literal game playing, there are certainly examples of fintech on the market which encourage customers to budget more effectively. These are usually designed to be effective from the perspective of goal-oriented behavior. Particularly in the popular contemporary gig economy, apps like cash flow calculators are demonstrating how making budgetary fintech more accessible through simple design and encouraging the challenge element of utilizing tools to balance each month’s budget can be a route into responsible financial behavior. 

Cryptocurrency

The adoption of cashless financial transactions has become the norm for many of us. This is certainly expected to be a big aspect of the future of finance, with cryptocurrency emerging as one of the primary modern accounting trends. In some ways, the popularity of cryptocurrency is seen as a realization of financial gamification in and of itself. 

In essence, cryptocurrencies — particularly bitcoin — came onto the scene to remove the need for (and interference from) banks, governments, and other financial institutions. Supported by blockchain security systems, the intention is that users are able to make direct transactions without having to rely on the security provided by traditional institutions; the cryptography used in the transfer process is supposed to be more than sufficient. 

However, its rising popularity is said to be partly due to gaming, and Millennials’ comfort with using advanced technology. Over the last few decades, we have become used to receiving rewards in our games and apps that don’t necessarily have a physical presence, but we trust that they exist and understand how to utilize these rewards as readily as hard currency — from using in-game currency to buy bonus items, to receiving discount codes for responding to calls for action. This normalization of virtual trading and gamification of transactions could be contributing to a greater level of trust in the idea of cryptocurrency for rising generations.  

Professional Education and Training

The financial industry is currently evolving at a rapid rate, thanks in part to professionals finding ways to adopt advances in technology. It’s certainly a hardcore nerd sphere, utilizing aspects of data analytics, machine learning, and statistical predictive modeling to make an impact on everything from small businesses to entire markets. The fintech utilized by accounting professionals in educational environments also contain examples of gamification. 

As far back as 2014, a former Deutsche Bank employee produced an app called Investr to train new traders and hone their skills in navigating markets. Investr utilized various popular gamification methods, including providing virtual scenarios, the ability to build a profile, and a social element that allowed users to message one another and access daily market news. This approach not only capitalized on the user’s familiarity with social media and games, but also the propensity to learn through utilizing data to achieve goals.

Kaplan Financial took the approach of introducing competitive elements to fintech training platforms in order to boost the success rate of learners. As a training company specializing in tax and accountancy, they incorporated a “badging” system into their remote learning software which marked users as passing certain modules on their first attempt, or if they hit deadlines. They also posted results to a leaderboard, in order to encourage students to push to reach and exceed the results of their peers. 

Conclusion 

One of the important things to remember about gamification in fintech is that successful platforms don’t simply turn finance into a game, but they replicate design approaches in order to replicate positive gaming behavior. By utilizing elements of technology that customers and employees enjoy, financial institutions can encourage a greater level of engagement with useful financial services. It is, however, important to apply ethical standards that gamification prompts positive financial behavior, and doesn’t take advantage of the human desire for achieving goals.

Article submitted by Frankie Wallace

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