Gaming and finance have slowly started to overlap lately, this article outlines the importance and rise of gamification
The convergence of finance and gaming is revolutionizing the landscape of both industries, and the impact of this intersection is reshaping the way we engage with money and entertainment. The emergence of fintech has disrupted the traditional finance industry and introduced new ways of managing money.
On the other hand, gaming has long been a popular leisure activity, and the advent of digital platforms and mobile gaming has brought it to a new level of accessibility and reach. These two industries, which were previously considered disparate, are now converging in ways that are not only enhancing the gaming experience but also transforming the way we perceive and interact with finance.
As a result, there has been a surge of innovative startups and established companies alike, seeking to leverage the synergies between these industries and create novel products and services that can cater to the evolving demands of consumers.
Fintech and gaming share some fundamental similarities. Both are built on technology, data, and customer experience. Fintech companies use technology to create new financial services, while gaming companies use technology to create engaging experiences that keep players coming back for more. Both industries are also heavily regulated, and both face significant challenges in terms of cybersecurity and data privacy.
The Game-Changing Power of Gamification in Fintech
One of the most exciting trends in fintech and gaming is the rise of “gamification.” This is the process of adding game-like elements to non-game contexts, such as financial services.
Gamification has become increasingly popular in recent years, as it can help to increase engagement, motivation, and loyalty. In the financial industry, gamification can be used to educate customers about complex financial concepts, encourage them to save and invest, and reward them for good financial behavior.
According to a report by MarketsandMarkets, the gamification market is projected to grow from $9.1 billion in 2020 to $30.7 billion by 2025, at a compound annual growth rate (CAGR) of 27.4% during the forecast period. The report notes that the rise of mobile devices, social media, and the Internet of Things (IoT) is driving the growth of gamification across industries, including finance.
In the financial industry, gamification has been used to create savings challenges, investment simulations, and even virtual stock trading games. For example, Acorns, a popular investment app, uses a round-up feature that rounds up purchases to the nearest dollar and invests the spare change in a diversified portfolio of exchange-traded funds (ETFs). Acorns also offers a “found money” feature, which gives users cashback when they shop with one of the app’s partners.
Another example is Robinhood, a commission-free trading app that has popularized stock trading among millennials. Robinhood uses a simple, user-friendly interface that makes it easy for users to buy and sell stocks, options, and cryptocurrencies. The app also offers a rewards program that gives users free stocks for referring friends to the app.
Gamification is not without its risks, however. Some critics argue that gamification can encourage risky behavior, such as excessive trading or taking on too much debt. There is also a risk that gamification can create a false sense of security or oversimplify complex financial concepts.” [Beck, Albany]
According to this article, gamification tactics are already being implemented in the financial world. However, most of these tactics are features of Fintechs, which operate independently from major financial institutions. Is there a way to integrate the successful features of financial gamification into the same system that each person manages the majority of their finances? Is an in-house game feature possible to implement in banking? The article gives examples like Acorns rounding up feature and Robinhood stock trading. However, there are risks correlated with features like this and general gamification tactics. These tactics can encourage irresponsibility with one’s finances. Is there a way we could implement similar gamification tactics in a simulated enviromnet with the goal of education? Can we learn from the successes and failures of current gamification in finance and how can they be applied to financial wellbeing?
Beck, Albany. “The Future of Finance & Fun: How Fintech & Gaming Are Shaping the Industries.” Albany Beck, www.albanybeck.com/news-and-insights/the-future-of-finance-and-fun-how-fintech-and-gaming-are-shaping-the-future-of-industries. Accessed 5 Sept. 2024.
