At first glance, video games and wealth management do not appear to have too much in common.
But video games are beginning to have a big impact on the wealth management sector, as companies rush to adopt gaming elements to incorporate into their digital offerings.
‘We’re not trying to turn your net worth into a game, it’s about making your portfolio more engaging,’ said Verona Smith, head of platform at Seven Investment Management (7IM).
‘When video game designers are making something that will entertain a seven year old boy, they are dealing with very fleeting attention spans and so create interfaces that are very quickly engaging, intuitive and meaningful.’
7IM was an early adopter of the concept and launched its ‘gamified’ digital platform five years ago which applied several elements from the video gaming world.
In 2013, with the help of ex-Nintendo game designers, who had created blockbuster video games titles including Donkey Kong and Golden Eye, 7IM launched an app with features that included an interactive globe and power bars.
7IM is not the only wealth manager taking cues from video games. Global giants such as UBS are also getting in on the action.
‘One of the ways we have recently used gamification is to improve engagement with some of our investment research,’ said Kiran Ganesh, chief investment office head of investment advice solutions at UBS Wealth Management.
‘With our Europe outlook last year, we tried to explain how some of the different political outcomes could affect investments. So we created an interactive online game that allowed our readers to select a relevant topic, such as climate change, and go through how different political outcomes in Europe could affect these issues. This helped explain a relatively complex subject in a simple way.’
Gamification and loyalty
In a recent report, Deloitte found that gamification could ‘increase customer loyalty and satisfaction as well as utilisation rates’.
The trend towards gamification is not unique to private banking and wealth management, but Deloitte contends that it provides unique opportunities to reduce the emotional barriers of financial returns and low friction financial education.
Improving the usability of digital products is also a crucial part of Coutts’ push to recruit clients from the eSports sector, according to wealth manager Adrian Summers from the private bank’s sports, media and entertainment division.
‘Coutts is thought of as a very old bank that deals with the landed gentry. However, the bank is much more than that and is very focused on creating a relevant digital offering,’ he said.
‘We have at the forefront of our digital offering that it needs to be sophisticated and developed around what a millennial would want from their access to digital banking, namely, a user friendly website and a completely up-to-date banking app that work in tandem. When you can view everything in one place and logon easily it sets you up for that type of client.’
However, one of the misconceptions about gamification, or the use of video gaming elements in a non-video game setting, is that this is all about millennials, according to both Smith and Ganesh.
‘We don’t target specific client bases with this, despite the fact that it is often linked to younger clients,’ said Ganesh. ‘Really this is just a tool to improve understanding and engagement in general, rather than something to help engage with a younger client base.’
Smith added: ‘This trend is definitely not something that is being driven by millennial clients. We find that in general the main drivers of who uses this app are down to advisers and if they buy into its utility.’
Gamification could help improve how wealth managers meet their regulatory disclosure requirements as well, he added.
‘Where I would see this trend evolving is the use of gamification to get disclosure. We have to, as result of regulations like Mifid II, give ex-ante and ex-post disclosures for how we invest and I think that gamification could help deliver all this new information in a way that could be really useful for clients,’ she said.
Beyond engagement, gamification could be a tool to help understand client behaviour and create better risk profiling, according to Ganesh.
‘There is some promise in gamification to monitor the way people act in stress situations, which means that we can identify clients that will likely panic and sell out at the bottom of market crash,’ he said. ‘We typically try and work out the risk tolerances of a client by asking a series of questions, but sometimes people answer questions in a way that they would like to behave, not how they actually behave.’
However, despite the promise of gamification and its growing use, Ganesh stressed that it is not a silver bullet for client engagement and that the use of such elements should be measured and with a specific goal in mind.
‘Augmented reality is one area of gamification that we experimented with that didn’t quite work for us yet. We have to be careful with the application of these techniques that we are not just running towards the new and that there are tangible benefits for our clients,’ he said.
‘For example, while we definitely see the benefits in terms of engagement with our research and risk profiling our clients, we currently don’t apply gamification to our e-banking.’