How gamification could take investor experiences to a new level

By engaging clients in an intuitive way, gamification could help investors overcome financial and investment challenges.

My three sons all love computer games, and I understand why.  It’s just so much fun to dive into a fantasy world — and one where you’re the master of your own destiny.  Game creators have an incredible ability to create complex virtual worlds that are easy and exciting to explore.  This amazing dynamic exerts a strong pull over every gamer.

In a fascinating example of cross-industry convergence, wealth and asset management firms are hoping they can pull off the same trick.  They are betting that gaming techniques will help them to create enjoyable, empowering moments — and habits for their clients. Ultimately, these firms believe that gamification will revolutionize client experiences and relationships, leading to improved investor loyalty and better investment outcomes.

An engagement breakthrough?

We’re all familiar — perhaps too familiar — with the obstacles stacked in the way of long-term investment planning, such as feeling overwhelmed by it, not knowing where to turn for the best advice and procrastination.  Moreover, financial planning and investing are complex activities that, ironically, can feel unrewarding.  And while most of us understand the importance of long-term goals, they often seem remote from the challenges of our everyday lives.

When I consider how to make complex subject matter resonate, I think back to a US TV program I watched as a child called “School House Rock.” While I didn’t realize it at the time, these brief cartoon commercials – which explained topics like how bills are passed in the government – taught me lessons in a memorable and engaging way. If the investment industry builds on this behavioral approach, gamification could be invaluable in educating clients.

By engaging clients in a fun and intuitive way, gamification has the potential to help investors overcome financial and investment challenges, making complexity simple.  It can empower users, giving them the tools to navigate the investment jungle and succeed in their own, personal financial quest.  In fact, it could prove to be a great way to explain concepts such as risk and reward, or compounding, that firms often find so hard to communicate. 

These are bold claims, but they’re backed up by the way that gamification influences human behaviors. At the interactive level, it can “teach” complicated goals and techniques without even seeming to try, in the same way that computer games use incentives and rewards to keep us wanting to “move up a level”.  And at the investment level it takes a page from nudge theory and behavioral economics, guiding us towards decisions that are aligned with our long-term interests.