Problem of practice

The world of fintech has spawned many startups striving to address challenges related to accessibility and adoption of financial products across various segments. One approach that is gaining traction among many fintech apps is gamification. Research by Simon J. Blanchard and Mike Palazzo demonstrates that withdrawing gamification features (like rewards, prizes and points-based raffles) reduced user engagement.1 This implies that a segment of customers relied on rewards to sustain positive financial behaviour, thereby casting doubt on the long-term sustainability of gamification. This article suggests how CMOs and product managers can ta ilor gamification for specific customer segments to drive loyalty by enhancing intrinsic motivation. We also explore how gamification can be leveraged to advance financial inclusion for those at the base of the pyramid.

Special Issue

Gamification power & potential

Typically, gamification involves using game design elements such as points, rewards, badges, leader boards, challenges, and progress tracking to engage and motivate people to achieve specific goals or outcomes.2 Gamification also promotes repeat behaviours by making activities simple, more enjoyable and interactive.

Applying game-like elements to non-game contexts has become a popular strategy for enhancing customer experience and user engagement across diverse sectors, including education, finance, tourism and nonprofits. Organisations are increasingly implementing gamification to drive key outcomes such as higher activation rates and improved profitability, while aiming to enhance brand loyalty. Supporting this trend, the global gamification market is projected to grow significantly with market size (measured based on total revenue generated by products and services that integrate gamification, across industries) expected to expand from USD 15.43 billion in 2024 to USD 48.72 billion by 2029, with a projected Compound Annual Growth Rate (CAGR) of 25.85% over the forecast period.3

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Using a natural experiment involving the temporary suspension of a gamified reward module by Latin America's leading private chartered bank, Banco Capital, researchers Simon and Mike investigated the effects of discontinuing gamification (for 51 days) on three critical user behaviours: app logins, bill payments, and timely loan repayments. The gamification in their study involved integrating game design elements into a mobile banking app. Users earned spins on a prize wheel by completing specific actions, with rewards including cash prizes, points, and raffle entries. This system provided immediate incentives, such as small cash rewards, and long-term rewards through periodic raffles, motivating sustained engagement. The study revealed notable declines in these activities—20% (app

The global gamification market size is projected to expand from USD 15.43 billion in 2024 to USD 48.72 billion by 2029, with a projected CAGR of 25.85% over the forecast period

logins), 18% (bill payments), and 31% (loan repayments)—highlighting the reliance of user engagement on gamification-driven incentives. The impact of discontinuation of gamification was higher for newer users than for experienced users.

The research by Simon and Mike suggests that CMOs need to tailor strategies for different customer segments to optimise impact. In their study, new users experienced a more pronounced decline in engagement and financial behaviours (particularly app logins and loan repayment) when gamification was withdrawn. It indicates that extrinsic rewards may not be able to lead to intrinsic motivation, which drives habit formation.

Moreover, implementing gamification strategies can be costly, with expenses exceeding $250,000 (in developed markets) and ranging from $12,000 to $50,000 in emerging markets. These costs include direct expenses for technology development, rewards, compliance, and indirect costs for hiring data scientists, gamification experts, skilled personnel, marketing campaigns, and ongoing system maintenance.4

These overheads raise critical questions about gamification's cost-effectiveness and long-term viability as a strategic tool for CMOs and Executive Vice Presidents of product development tasked with activation, customer retention, and digital transformation. Maintaining user interest after the novelty of gamification wears off can be difficult, particularly if users rely heavily on extrinsic rewards. This naturally leads us to an important question: Can the behavioural changes driven by gamification persist without continuous reinforcement, or are they

Gamification strategies

A useful guide (framework) to developing gamification strategies focused towards driving positive behaviour can emerge from the interplay between rewards and intrinsic motivation. The framework is based on two aspects – the Extent of Rewards (Rewards) and the Extent of Intrinsic Motivation (Motivation). See Figure 1.

When the Motivation and Rewards are low, customer engagement is minimal and often leads to high churn rates. For example, customers may avoid participation due to the expected cognitive load of understanding a complex product such as equity. In such scenarios, gamification should focus on training and learning modules that simplify the product, build understanding, and gradually enhance intrinsic motivation.

When Motivation is low and Rewards are high, users are driven primarily by rewards like cash prizes or points. Gamification in such a context is effective for onboarding new customers, and the nature of the game should be focused on driving specific outcomes, making it ideal for transactional activities such as app downloads or bill payments.

Gamification & intrinsic motivation?

Research on motivation suggests that complex, boring or daunting tasks typically require external rewards to motivate adoption. Intrinsic motivation, on the other

hand, refers to the individual's drive to engage in an

activity/behaviour out of genuine interest or for

inherent enjoyment and personal satisfaction. While

gamification strategies primarily leverage extrinsic

motivation, they can also drive intrinsic motivation,

depending on their design. Rewards attract users and

Low High

The high Motivation and low Rewards quadrants are the ones in which consumers have such high intrinsic motivation that external rewards provide only incremental value. The role of gamification in this quadrant is to sustain engagement and deepen the connection with the product.

Finally, the high Motivation, high Rewards quadrant will have users who benefit from both immediate rewards and the satisfaction of achieving intrinsic goals, such as mastering financial skills or tracking progress. Gamification strategies in this quadrant should effectively support both the onboarding and long-term retention, fostering a well-rounded user engagement strategy.

The advantage of this framework is that it allows targeting the same consumer with multiple gaming strategies for different product categories. For example, a consumer may be highly intrinsically motivated to engage with a loan product but may have minimal intrinsic motivation for investments or insurance. This consumer should thus be targeted with appropriate rewards to drive attitude and behaviour in investments/ insurance, unlike the minimal need for rewards when it comes to loans.

This also explains the progression from the bottom-right to the top-left quadrant (when offering a new product), ultimately creating a self-sustaining reinforcing loop, which is the ideal way businesses should function. Also, there is no perfect quadrant that we are advocating for. The key takeaway is to position your customers in this 2x2 matrix, with respect to your offerings. When organisations are segmenting their customers, they can place them in these quadrants and define strategies accordingly.

The dual barrier of limited general literacy and low financial literacy is one of the major limiting factors preventing widespread adoption and usage of financial services among the BoP segment

Shaping financial habits

International companies like Qapital, MoneyBox, and eToro, to name a few, use gamification to foster positive

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financial behaviours. Features like customisable savings goals, interactive saving tools, and virtual stock trading combine fun with financial literacy, encouraging saving, investing, and responsible money management through engaging and practical user experiences.

In India, companies like Bajaj Finserv, Paytm, Google Pay India, CRED, HDFC Bank, ICICI Bank, and State Bank of India, are leveraging gamification to drive customer engagement and influence financial behaviours. Bajaj Finserv, a financial services company, effectively integrates gamification by blending rewards, progress tracking, contests and educational tools. For instance, customers who use the Bajaj Finserv EMI Network Card for purchases are incentivised with offers, discounts, and gamified challenges for usage.7 It also partners with e-commerce and retail partners to integrate gamified offers. Google Pay offers its customers a scratch card after each transaction, offering varying values.8 This element of surprise keeps users engaged, unlike the fixed cashback rules provided by competitors. Paytm also offers a gaming platform, FirstGames, which enables users to win Paytm cash, movie tickets and physical goods.9 Likewise, HDFC Bank's PayZapp delivers a gamified mobile payment experience by offering rewards and cashback tailored to users' payment habits. Users receive cashback and points for activities such as bill payments, recharges, and online shopping, and a leaderboard highlights top users based on transaction count or points, fostering healthy competition.10 ICICI Bank employs gamification as an icebreaker, using its iMobile app to promote smart saving and investing through interactive features. Similarly, ICICI Securities' Virtual Stocks game on Facebook allows users to trade with virtual money, providing a secure platform to learn stock market strategies.11 State Bank of India's fully automated digital branches feature gamification tables designed to assist customers with investment planning.12