4 minute read 4 Apr 2018
friends gaming home

How gamification could take investor experiences to a new level

By

Mike Lee

EY Global Wealth & Asset Management Leader

Spirited leader for wealth and asset management. Champion for change. Driven to produce better outcomes and simplify the complex. Passionate about family, friends and sports.

4 minute read 4 Apr 2018

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By engaging clients in an intuitive way, gamification could help investors overcome financial and investment challenges.

My three sons all love computer games, and I understand why.  It’s just so much fun to dive into a fantasy world — and one where you’re the master of your own destiny.  Game creators have an incredible ability to create complex virtual worlds that are easy and exciting to explore.  This amazing dynamic exerts a strong pull over every gamer.

In a fascinating example of cross-industry convergence, wealth and asset management firms are hoping they can pull off the same trick.  They are betting that gaming techniques will help them to create enjoyable, empowering moments — and habits for their clients. Ultimately, these firms believe that gamification will revolutionize client experiences and relationships, leading to improved investor loyalty and better investment outcomes.

An engagement breakthrough?

We’re all familiar — perhaps too familiar — with the obstacles stacked in the way of long-term investment planning, such as feeling overwhelmed by it, not knowing where to turn for the best advice and procrastination.  Moreover, financial planning and investing are complex activities that, ironically, can feel unrewarding.  And while most of us understand the importance of long-term goals, they often seem remote from the challenges of our everyday lives.

If the investment industry builds on this behavioral approach, gamification could be invaluable in educating clients.

When I consider how to make complex subject matter resonate, I think back to a US TV program I watched as a child called “School House Rock.” While I didn’t realize it at the time, these brief cartoon commercials – which explained topics like how bills are passed in the government – taught me lessons in a memorable and engaging way. If the investment industry builds on this behavioral approach, gamification could be invaluable in educating clients.

By engaging clients in a fun and intuitive way, gamification has the potential to help investors overcome financial and investment challenges, making complexity simple.  It can empower users, giving them the tools to navigate the investment jungle and succeed in their own, personal financial quest.  In fact, it could prove to be a great way to explain concepts such as risk and reward, or compounding, that firms often find so hard to communicate. 

These are bold claims, but they’re backed up by the way that gamification influences human behaviors. At the interactive level, it can “teach” complicated goals and techniques without even seeming to try, in the same way that computer games use incentives and rewards to keep us wanting to “move up a level”.  And at the investment level it takes a page from nudge theory and behavioral economics, guiding us towards decisions that are aligned with our long-term interests.

Children gaming in an arcade

From fantasy to reality

Gamification isn’t just about making investing fun, or empowering investors.  It’s becoming a serious business.  Wealth and asset managers of all sizes are developing their capabilities.  And this is no niche strategy.  Gamification can be applied to mass affluent, high-net-worth and institutional relationships.  For example, insurers or pension funds could use gamification to help their own investors build a stronger connection between their finances and their real lives. 

By creating a more tangible future, gamification could be a huge savings motivator for investors. Imagine setting a savings goal for your dream home, and being able to build, design and even tour (via virtual reality) a mock-up home based on your budget.

So how might the gamification of financial planning look? Clients would interact with their personal and financial goals through their firm’s game-based app. This approach could use retail bonuses like a free coffee to reward initial engagement (based on analysis of customer data — see my previous blog), and harness gaming techniques to encourage clients to work toward investment goals to meet their desired outcomes. It might even provide a virtual reality simulation of investment benefits for clients and their families. This would allow clients to visualize the benefits of their financial decisions, creating a stronger emotional desire to achieve their investment goals.

By creating a more tangible future, gamification could be a huge motivator for investors to save. Imagine setting a savings goal for your dream home, and being able to build, design and even tour (via virtual reality) a mock-up home based on your budget. Or how about seeing your child receive their diploma as they graduate from the college of their choice?

Collaborating to compete


It will not be easy for wealth and asset managers to devise strategies that successfully deliver on the immense potential of gamification. At a minimum, they will need to:

  • Consider how gamification could support their wider strategic objectives
  • Evaluate how gamification could be used both to enhance direct investor relationships and to support intermediary channels
  • Identify the investor segments that are most likely to respond to gamification
  • Collaborate with the right external partners across a range of industries
  • Combine expertise in behavioral science, coding, investment knowledge, virtual reality and data analysis
  • Connect virtual incentives with real-world rewards

For firms, the bottom line is that gamification could revolutionize client relationships and, in doing so, improve investor outcomes. It has the potential to create a virtuous circle of engagement, learning, trust and loyalty. Having more engaged and empowered investors will open up new opportunities for firms and clients alike, and may even pave the way for further industry convergence in the near future.

Game on!

Summary

To take investor experiences to a new level, wealth and asset managers should apply learnings from gamification.

About this article

By

Mike Lee

EY Global Wealth & Asset Management Leader

Spirited leader for wealth and asset management. Champion for change. Driven to produce better outcomes and simplify the complex. Passionate about family, friends and sports.