Given the widespread obsession with video games, it’s no surprise that the financial services industry is looking to “gamification” as a new means of engaging with customers.
But why is it that, when video games can get their players to invest hours of time learning intricate game mechanics, financial institutions struggle to get users to spend mere minutes on a learning app to build knowledge about critical areas like pensions and life insurance?
By studying why people play video games, we have found that games rarely have the luxury to motivate users to learn their rules because it was important – only because it was rewarding in and of itself.
Despite a recent influx of disappointing and poorly executed ‘gamification’ elements in financial tools and services, we believe the learning models from video games offer three key lessons for building more effective digital tools for improving financial literacy.
Keep the pinch
When Super Mario Bros. launched on the Nintendo Entertainment System in 1985, it came with a 22-page instruction booklet.
Although this was well written and illustrated, it quickly became clear that players don’t learn how a game works by using an instruction manual.
Instead, players learn by ‘feeling the pinch’ during gameplay – experiencing the risk of miscalculating a jump over a speeding tortoise shelling and losing Mario’s life in the process.
Over the years game designers have adjusted their learning models, replacing abstract booklets and risk-free tutorials with in-game learning incorporating the consequences of faulty moves.
By contrast, most financial literacy tools work in completely fictional environments without any ‘pinch’.
Winning or losing doesn’t impact your finances, your pride nor your status, as the gamified elements are often disconnected from actual accounts and therefore removed from real life risks and rewards.
Enable a state of flow
As a consequence of video games’ diversified audience, their learning models need to adjust to skill level and context. By scaling difficulty and changing interfaces appropriate to a rookie or a veteran, games are able to keep players in a state psychologists refer to as ‘flow’.
If you have ever walked in on a teenager completely immersed in a game, you are familiar with flow.
Players lose track of the surrounding space and time in a state of total absorption, which also happens to be conducive to learning.
Digital finance tools and games, on the other hand, tend to present users with a more or less homogenous interface, with no regard for your actual level of financial skill or context.
A busy parent who quickly checks up on savings on a mobile, say, should get a different interface and engagement than the DIY investor who sits with a laptop on her couch.