While it has its risks, gamification can be a valuable tool to help wealth managers improve customer engagement and loyalty.
This came from the tenth episode of Kidbrooke’s podcast series, which aims to help financial professionals navigate the digital transformation of their businesses.
During the milestone episode, the hosts, Kidbrooke head of business development Zaliia Gindullina and Kidbrooke head of marketing Natalie Burke, focused on how businesses can keep customers engaged to all stages of the financial journey.
The digital world has transformed finance for the better. At the touch of a button, a person can check their accounts, transfer money to friends, monitor savings, make an investment, and so much more. While this simplicity has made the financial lives easier for people, making the best use of these services can be difficult, particularly when it comes to investing. However, Gindullina believes this all changed with the advent of gamification.
“It is still intimidating for many to invest without having an in-depth understanding of how financial markets operate. However, this took a turn when more financial services companies embraced the incorporation of gamification into the journeys,” she said.
Gamification helps to boost customer engagement by replicating games, such as allowing users to earn points and badges or compete via leaderboards. These features are proving to be incredibly popular. In fact, the global gamification market is expected to be worth $30.7bn by 2025, a report from MarketsAndMarkets.
Despite the appeal of gamification, Burke highlighted there has been a lot of controversy about using gamification to attract customers. The biggest problem with these techniques is the desensitisation to risk. In the search for more points, it is easy to forget these financial apps are dealing with real money, and as a result they can distract customers from the risks of investing and lead to poor investment decisions. These features have even led to people making investment decisions out of their risk appetite. The problem with gamification has been noted by regulators and many are looking at the space. The UK’s Financial Conduct Authority recently commented on the features and warned people of the risks.
There is a tough balancing act as firms look to embrace gamification but ensure there are protections for their customers.
Gindullina said, “Ideally, we want to create engaging financial journeys that build customer loyalty and improve profitability of digitalised business models. When used well, gamification can be a powerful tool for increasing access to financial services, improving financial literacy, and making the general experience much more enjoyable. In fact, a study by the University of London’s Bayes Business School demonstrates that gamification techniques can encourage investors to lock away more of their earnings and investments.”
To add to this, Burke highlighted that wealth managers need to do more than simply include leaderboards or badges. To be of real value for customers, basic features like these are not enough and will not improve the financial engagement.
“It does seem like it’s impossible to get the most out of the engaging gamified elements in financial journeys without enhancing the analytics behind them. To deliver truly responsible and engaging experiences, wealth managers or execution platforms should equip their digital and hybrid workflows with enhanced decision-making tools that help their clients make better informed financial decisions.”
Financial analytics can add so much more value than “digital confetti”, Burke added. They can support personalised goal creation elements that empower the customer to understand the services and let them understand how investments are likely to perform over time.
Burke and Gindullina both agreed that improved customer engagement is vital for the success of a wealth manager. Those that can provide customers with an engaging and interactive financial journey that improve decision-making will gain greater customer loyalty.
Burke said, “As the economy continues to slump, calls for investing apps to become more responsible are likely to amplify. In the coming months, many consumers may turn to execution platforms and wealth managers, as a way of offsetting the rising cost of living. If advisors can be equipped with the right tools and their platforms provide responsible and engaging technology, they can use this opportunity to expand their customer base, and help more categories of consumers receive better informed financial decisions.”
To get more insights about boosting customer engagement during the financial journey listen to the podcast here. The podcast is also available on many other services, including Apple Podcast, Amazon Music and BuzzSprout.
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