Will Gamification Fix Our Finances?

The other night I was reviewing my Acorns account. Over the past 30 days, I’ve hit the lunch counter at work nine times and my coffee shop on 13 different mornings. Acorns rounded up all 22 transactions to the nearest dollar and sent $14.39 in ‘Round-ups’ over to my investment portfolio.

During the previous month, it was 27 transactions and $16.85 in contributions—I was behind.  

Acorns is using a motivational factor called gamification to keep me engaged with the app. The more accounts I link up and the more I spend, the larger my diversified investments grow.

The financial industry has been incorporating gamification into user experience for several years. Now that we conduct most of our banking online, we’re seeing it more than ever. Points, rewards, and alerts are a common occurrence.

These gamification features are designed to make you like a particular app, and to want to keep coming back to it. And I’ll admit, checking how much money I’m squirreling away each month with Acorns has become a fun little game.

But is gamification really going to help us manage our finances better?

Putting the ‘fun’ in ‘functional’

According to Gamify author Brian Burke, the term gamification was first coined by British consultant Nick Pelling in 2002. It was used to describe game-like user interface features that make electronic transactions both enjoyable and fast.

You can add “addictive” to that list as well. Gamification, at its core, involves creating positive feedback loops that keep us coming back for more. You have a goal, you work to achieve that goal, you get a “reward…” and a new goal. It’s the same strategy that’s used to keep people playing Candy Crush or any number of addictively simple mobile games.

Common elements of gamification include:

  • Digital over personal engagement—meaning interaction with computers and smartphones.
  • Motivation goals to change behaviors or develop skills.
  • Game mechanics such as points, badges, and leaderboards.

We see gamification in everything from online courses to vendor loyalty programs.

Team Treehouse has completely gamified the process of learning to code. Students are awarded points and badges as they complete assignments and quizzes within a course module.The modules are laid out in order along a larger path called a Track. The student levels up each time they complete a module and move further down the Track.

Starbucks has gamified customer loyalty with My Starbucks Rewards. As a member, each purchase is rewarded with Stars which can add up to free food and drinks. Rewards members also enjoy perks like free in-store refills and the ability to order ahead and pay by phone. Earn 300 Stars in 12 months and you reach Gold status. Achievement unlocked!

Gamification is now standard practice in financial apps

Using game-like elements in apps is win/win for both the consumer and the banks. The addictive qualities of ‘winning’ keeps users investing larger amounts, growing their savings, and paying down debts faster. The banks, in turn, keep a highly engaged customer base.

Venmo—a mobile payment app—gamifies its payments by allowing users to post their payment transactions and accompanying messages on a public social feed. Other users can then like and comment on these transactions.   

By combining the best aspects of PayPal and Facebook, Venmo has created a new social network. Venmo’s newsfeed is the secret sauce that keeps users on the service. The more transactions you post, the more prominent you become on the feed. Venmo empowers users by giving them dynamic feedback, social influence, and status—the gamified rewards that keep them coming back for more.

With the successful adoption rate of financial apps such as Acorns and Venmo, the gamification of your finances is here to stay. Banks are working harder than ever to retain their customers and gamification will remain a powerful way to keep loyal members engaged. More and more gamified features will be added on for savings and investing options as the rest of the banks jump on board.

So how safe are these ‘gamified’ apps?

To put your mind at ease, apps such as Square Cash and Venmo are compliant with the Payment Card Industry Data Security Standard (PCI-DSS) Level 1. These are the same security standards created and maintained by Visa, MasterCard, and American Express. When your information transmits to each company’s servers, it’s encrypted and backed by 24/7 fraud and risk protection.

It’s also important to remember that game-like elements don’t make these financial apps into games. You shouldn’t consider them silly, childish, or ineffective—in fact, unless you have read up on gamification you probably wouldn’t even consciously notice that these apps are borrowing ideas from games.

Finance apps are employing game design elements to keep you consistently engaged with them. And, more importantly, to keep you from deleting them from your phone. Their goal is to get you hooked on their particular app, in order to make money off of you through marketing efforts.

But that’s the goal of most apps out there. The difference is that with financial apps, you might actually be making a big difference in your life by playing the game. If these apps are making money management and budgeting into something fun and addictive—we all stand to win.