As gamification starts to take foot on a global level, more and more countries are coming into the mix and thinking up innovative ways in which different industries can be enhanced through its use. Today we’ve got a post about gamification in the banking industry from Halil Furkan Kesler, Product Development Assistant Associate at Kuveyt Turk Participation Bank in Istanbul, Turkey.
In this little article I’d like to draw your attention to a situation in retail and corporate banking and explain why gamification could become a real solution for these sectors.
Inflation and interest rates are key factors that banks constantly have to keep track of and accommodate. Some countries like Japan have a pretty low inflation rate of about 1%, and banks charge reasonable commissions for transactions as their interest rates are low and they provide loan facilities for a very low return. But there are also countries that have higher inflation rates, like Turkey for example, and in such countries banks need higher interest rates to maintain their profit margins.
In the Turkish banking model many banks use ‘over the counter’ and ‘under the counter’ interest rates. The former refer to interest rates that are public and official and the latter to rates that are confidential. This means that if I decide I want to open a savings account, the bank will offer me official over the counter rates. But if I object to these rates there’s a possibility of getting higher rates if I negotiate. So we end up with two types of customer, those who just accept the over the counter rates, and those who haggle for better ones. Naturally, banks love the first type of customer, who just accepts blindly what’s laid out in the blurb. But really what they should be doing is keeping their customers happy by offering higher rates to those who dare to negotiate. As it stands at the moment, it is the bank who does the bargaining, not the customer.
And this, I think, is a problem and essentially is a form of exploitation on the part of the banks.
Which is where gamification comes in. I think gamification is a great model for this sort of situation. After all, banks give the best rates to their most valuable – often private – customers; but by using game mechanics to drive valuable customer behaviours, generate engagement with the products and build customer loyalty, the banks will then automatically be increasing the value of their own customers. By increasing engagement and loyalty the bank will inevitably generate more money from its customers, so in turn will be able to offer them higher rates.
Gamification is a brand new model for the financial industry, and from the outset it’s clear it has a lot of potential, from driving customer behavior, maintaining a competitive edge and managing customer relationships to aiding in data analysis and communications.
So by genuinely engaging customers the rewards should not only be virtual, in the form of points or badges, but also tangible, as the profits generated by the bank trickle down to the customer in the form of a better interest rate.