Customer engagement design is the key to traditional bank survival

Traditional bank-to-customer relationships are slipping away

Historically, big banks held all the cards in the financial services game. But the rise of online competitors has resulted in the oligarchical banks losing their once unassailable positions. Increasingly, customers are taking their business to financial providers that are more flexible and better equipped to handle their growingly diverse needs while providing a great customer experience. Luckily there is something that banks can do to help regain their previously strong foothold. The key is in understanding their customers at a very deep level by applying human-focused design and gamification.

Proving products against fast-moving competitors

In a game, the game designer monitors player data and behavior to see how players are interacting inside their well crafted system. When players are not behaving as they predicted (or wanted), the designers adjust the system to account for the underlying motivations driving players to take actions. The result? More players do what the designers intended and it feels great for the players to take those actions. Gamification Designers like The Octalysis Group have taken their cues from successful games and have become masters at creating similar engagement in the real, non-game, world.

Startup founders and their product teams often employ Gamification Designers. It enables them to understand their customers and move quickly to adapt the design of their system to cater to the human behaviors of their users. With the right mechanics, feedback loops, and embedded incentives, players reach continuous win-states, the startup gains traction.

With the pace of these agile competitors biting at big banks’ heels, even the most entrenched banks must now prove their products are actually worth engaging with and consistently adapt to customers’ changing behavior.

Three areas where big banks are losing

A few key areas stand out as opportunities for large banks to focus their efforts.

With payments as a gateway into any financial relationship, banks are naturally big players in the payments space. However, competition has eroded their strength.

From hardware-software blends in payment terminals like Poynt to small business accounting software-focused leaders like Quickbooks or Xero, the competition to bank services is already stark and deteriorating in these categories:

  • payments-service capabilities (dialing to customers’ most urgent desires as behaviors evolve from e-payments to mobile to AR to smart device payments)
  • operational skills (either in niche or focused segments)
  • client service (smaller outfits tend to obsess over customer engagement to win business and loyalty)

Banks should be able to win in the long-term through the halo effect of customer relationships combined with multichannel services and stability.

The question is…will they?

Helping customers stop slipping and start sticking

The number one variable at stake is customer engagement.

Consumer banks need to make their online sales and cross sales a lot more engaging. This goes well beyond improving a user interface for a web-3.0 world and building native experiences across devices.

Let’s forget about the competition for a moment. What does a big consumer bank need to do to keep more customers?

This is the same question the game designers ask about how to keep their players engaged. This question can’t be answered without knowing something about the players and what they want from an experience and what they get out of an experience in terms of extrinsic or intrinsic rewards.

The Octalysis Group has been successful at creating such balanced “Gamification” design for their customers. The key for them is to understand the Octalysis Framework, based on in-depth behavioral science, and implement the Strategy Dashboard approach.

An approach to understanding customers and designing an experience

The Octalysis Framework lays out the motivational power of the  8 Core Drives for human motivation. The Octalysis Strategy Dashboard is the implementing model to create high ROI design for companies

The Strategy Dashboard contains five critical elements:

  1. Business Metrics, leading to Game Objectives
  2. Users, leading to Players
  3. Desired actions, leading to Win-States
  4. Feedback Mechanics, leading to Triggers
  5. Incentives, leading to Rewards

When set up correctly, the Strategy Dashboard provides critical information to help clients execute an actionable Gamification campaign to drive their business metric goals.

The Octalysis Group has used the Strategy Dashboard (and the extensive experience and knowledge of behavioral science) to create engaging user experiences for financial companies in Asia, Europe and the US. These companies are now much better armed to deal with the challenges that online financial companies pose.

You can learn more about the Strategy Dashboard here.

To learn how we can assist your firm in creating user engagement for your products and get a stronger market position, get in touch with Joris Beerda right now.

Joris Beerda, Managing Director The Octalysis Group

Leading Octalysis Expert, International Keynote Speaker, Behavioral Scientist and Managing Director of The Octalysis Group.

Joris‘ career in creating engagement spans almost 20 years, in 4 continents and 17 countries.

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