Game Over? How Customers Respond When Mobile Banking App Rewards Go Dark

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A UC Davis Graduate School of Management study recently looked at the gamification of banking apps. (Getty Images)

Companies have started the process of gamifying a large variety of products, even mobile banking apps. In a recent study, in collaboration with Flourish Fi, researchers looked at what happens when a rewards program is stopped as well as if consumers continue or stop incentivized behaviors was investigated. More specifically, the use of gamification to encourage adoption of digital financial services was examined. Data was collected on a natural experiment where a bank app was disabled for 50 days due to licensing issues.

Does gamification drive key customer behaviors?

The three main behaviors of interest of the banking app were app logins, free in-app bill payments, and on-time loan repayments. These behaviors were incentivized with gamified rewards like spinning a wheel, raffle tickets, scratch cards, or in-app currency which was redeemable for other prizes. The focus on the study was on whether this gamification caused the customer’s behaviors that the bank intended to motivate, and if it was necessary to continue gamification over time.

The study found that the empirical truth was somewhere in between, with the removal of gamification leading to a partial reduction in all three studied behaviors:

  • 20% reduction in their bank app logins18% drop in their use of free bill payments
  • 31% decline in the number of on-time loan repayments
  • 31% decline in the number of on-time loan repayments

While customers did not entirely abandon the app when rewards were removed, there was nonetheless a large reduction in all three key behaviors.

Gamification's impact on user engagement in financial services

Our research is the first to study the use of gamification within financial services with more than one game-design element. Although many recent implementations of gamifications with financial service providers make the use of several intertwined game-design elements (e.g., SoFi, Qapital, Robinhood), most past studies of gamification in financial services evaluated how a single game-design element (e.g., a raffle) is used to motivate users toward a single action (e.g., saving).

Our findings provide managers and executives with valuable insights into gamification as a marketing tool to enhance user engagement and drive specific financial behaviors.

Gamification isn’t a short-term fix. It’s a long-term play for banks to further engage with their customers.

Our study, "Game Over? Assessing the Impact of Gamification Discontinuation on Mobile Banking Behaviors" was recently published in Marketing Science.

* Editor's note: Co-author Simon Blanchard is a Provost's Distinguished Associate Professor and Associate Professor of Marketing the McDonough School of Business at Georgetown University.

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