Creating and sticking with good habits isn’t easy. It takes time and repetition and requires the kind of discipline that, for many of us, is hard to access.
That’s where gamification comes in. The idea behind this strategy is that by introducing the elements of a game — competition, rewards and fun — you can motivate people to make better choices again and again until they become habits. Tech companies are using it to build tools that, for example, help kids with diabetes more efficiently manage their blood sugar by monitoring a baby dragon’s blood sugar.
Financial institutions can harness this same technology to advance inclusion. As banks look for ways to build trust and encourage people to use digital tools that can help them better manage their finances, gamification is proving to be a powerful option, especially in Latin America, where account ownership and financial digitalization is growing faster than in other regions.
Gamification can help those new users improve their financial health and become long-term customers of banks. Studies have shown that gamification can help people financially stay on track with things like bill and loan payments, which means better credit, more financial stability and a strengthened relationship with their bank.
“Moving people from access to usage of financial tools can go a long way toward building a more financially inclusive world, but getting people to usage is still a challenge,” says Natasha Jamal, vice president of social impact for Mastercard Strive, a global program that helps small businesses around the world to thrive in the digital economy.
Making financial services fun
“Part of the challenge is that in some cultures, simply talking about money can be taboo,” says Pedro Moura, co-founder of Flourish Fi, a California-based fintech that combines gamification with behavioral science to increase customer loyalty and engagement with financial institutions across the Americas. That means consumers are missing the knowledge they need to embrace healthy financial habits, and banks have an opportunity to help with that financial education. When money isn’t discussed, good money management can feel out of reach.
“This can be as simple as paying their bills on time, building a little bit of a rainy-day fund or making smarter decisions in their financial lives,” says Moura, who was the first in his family to access financial services in the U.S. after they emigrated Brazil. “We’re turning that interaction from transactional into a fun element.”
Flourish Fi, a veteran of Mastercard’s Start Path startup engagement program, aims to help banks better connect with people who are new to the banking system. Moura says the key is mixing personalized nudges with data intelligence and incentives to drive behavior. Flourish Fi uses APIs — the application programming interfaces that help software systems talk to each other — to connect with financial institution partners’ apps or websites to give consumers opportunities to play games that help them improve their financial health.
When customers log in to their account, paying bills on time might trigger a wheel of prizes for them to spin. Or they may choose settings that automatically make micro-deposits based on a beloved sports team’s wins.
In partnership with a number of banks, Flourish Fi rolled out its product in Brazil and across Latin America for individuals in 2018. After using Flourish Fi, consumers increased their deposit values by 32% and their online bill payments by 26%, and they doubled their usage of partner banking apps. Banks and credit unions also benefit from the technology because it helps them strengthen customer relationships and build trust with people who might otherwise transact offline.
Brazil’s Banco Carrefour and Bolivia’s BancoSol have found that customers log in to their app or website twice as much as they did before Flourish Fi was added, Moura says. Customers who previously saved nothing over six to eight months now save some $600 over the same period. Incentives on Flourish Fi, such as the ability to spend points earned from quiz-taking or on-time loan payments on prizes, also mean that banks’ repayment levels are rising.
Bringing gamification to small businesses
Most recently, Flourish Fi forged a partnership with Mastercard Strive to expand its service to yet another group in need: micro-entrepreneurs. These small-business owners often struggle to use digital financial services to help them meet their business goals.
In Brazil, 77% of micro-entrepreneurs have never taken a course or training in finance, according to Brazilian micro- and small-business support service Sebrae. At the same time, one in three don’t check their bank account and have no record of money coming in and out of their business.
Through gamification, Flourish Fi incentivizes responsible financial business management practices like saving or investing money and paying loans and bills on time. For example, Flourish Fi helped inspire Brazilian corner store owner Maria Lourdes to digitize her business.
“What’s top of mind for a small entrepreneur is they want to sell more and manage their time more effectively,” Moura says, “and we support individuals with journeys of better understanding financial services.”
Using Flourish Fi, Lourdes was incentivized by personalized rewards and micro-content on ways she can bolster her business by accepting digital payments and then paying her bills with the money she’s bringing in. Micro-content on the app also taught her how to further tap into financial services to enhance her business’s financial health.
Flourish Fi now helps 375,000 people across five countries. But there are millions of individuals like Lourdes who still need support, Moura says.
It’s his hope that through continued partnerships with the private sector, Flourish Fi will foster many more individuals’ and small businesses’ resilience and growth by incentivizing them to make better use of digital financial services and build responsible money management habits.
“If you design a more inclusive financial system, you’re unlocking the dreams of millions of individuals,” Moura says. “People want to be the best version of themselves. They just need access, support and sometimes just a little bit of a reward to stick on their path.”