Why Lending Tech Must Step Up Their Gamification Game
Updated: Jul 2
We are pleased to offer you a loan up to…
How many such calls and SMSs do you get in a day? Or should I rather ask, how many such communications do you ignore in a day?
It’s annoying, isn’t it? Having to deal with such an information overload of loan offers at varying interest rates, credit card applications and guess what?
As I’m writing this, I just received another personal loan call from a bank! Seriously, such companies feel like sharks fighting amongst themselves in the sea of our attention span.
But why is it that we continue to dodge their attacks? Or even if we end up going ahead with their offers, why is it that we leave? Because
1. Lending Tech Processes Are Complex
Or at least considered complex and I’m speaking for the customers. While digitization has surely provided some relief to it, people still see it as a lot of work amidst their busy lives.
I also found out that long application times, multiple steps, and verification requirements cause 70% of credit and 42% of loan applicants to abandon applications mid-way.
This was one of the reasons why I didn’t complete my Video KYC process for the ICICI credit card due to multiple to and fro. I’ve shared my experience in detail here.
2. What’s In It for the Customer?
Trust me, you as a lending tech company are one among the many that reach out to your potential customers on an everyday basis.
So no matter how good your offerings are, in the end, they always end up finding it all the same unless they are motivated to choose you.
That’s right! Until customers don’t personally see a goal to go with your company, they don’t care and if they do, they will change their minds.
I experienced exactly this with ICICI bank when I saw that I could avail of a good discount on my Amazon purchase if I used an ICICI bank credit card.
Seeing this, I decided to apply for a credit card with a new energy. My energy this time was so lively that I didn’t need any bank agent.
I visited the credit card website myself, chose a card of my preference, applied, completed the entire application, and received my card.
Surprising shift, right? From a person who was least interested in applying for a credit card back when the bank agent reached out to a person who did it all by herself.
What do you think was different this time? Extrinsic motivation.
Extrinsic Motivation in Lending Tech
My behavior of applying for a credit card was motivated by the fact that I’d get a discount offer if I used it while shopping.
This discount acted like a reward that pushed me towards completing my credit card application.
But you must also note that the reward that I was getting was meaningful to me since I wanted to purchase an Amazon product at a discounted price.
Now if you pay close attention, you will realize that you as a lending tech company can use a similar strategy to improve your customer acquisition, engagement, and retention rate.
That’s right. You can gamify user experience by offering tangible rewards for completing tasks such as loans or credit card applications.
Your user may not enjoy the application process but would still be motivated to do it because of the outcome - reward and that’s exactly what LendUp, SoFi, and Nubank experience with their gamification.
Let’s take a look at 3 gamification examples in lending tech.
1. LendUp Credit Card Ladder Gamification
What is the first thing that matters the most when it comes to loans? Credit score. People with good credit scores get tons of offers but what about the ones with bad credit scores?
LendUp took care of that by offering payday loans, installment loans, and credit cards to people with bad credit.
With "The emerging middle class," as its target, this 2012 launched US-based lending tech company gives people with bad credit another chance by offering same-day loans.
They made it a success by gamifying loan borrowing with a tiered point system gamification called ‘LendUp Ladder’.
LendUp Ladder let users borrow a flat loan amount, gain points for on-time repayment and get higher loan amounts at lower rates.
The concept was simple
Start at Silver level and get up $250 of loan amount.
Repay on time and earn points to climb to the Gold level and get a higher loan amount
Repeat the same process and keep climbing to higher levels like Platinum and Prime to apply for higher loan amounts and types. Users could also become eligible for perks like repayment behavior report to credit bureau.
Applying for a loan was just one of the ways to gain points. Points could also be gained by doing actions such as
Getting loans from LendUp
Watching financial health education courses for free
Referring friends
Sharing testimonials
LendUp Gamification Success
Gamifying lending process became so successful for LendUp that in December 2015, LendUp grew their customer base by 36% percent and did several 100 million dollars in loan volume a year.
They also got over 2 million views on their financial education courses around money management, credit profile, and more, views by customers. In January 2020, LendUp ended up disbursing over $2 billion in consumer financing through its digital lending platform.
2. Standard Chartered Shake & Win Campaign
Successful gamification campaigns are ones that can connect with people’s emotions and encourage them to participate from within.
Standard Chartered Bank Malaysia knew this too well and introduced a Shake and Win campaign during the new year from December 2017 to February 2018, to increase credit card transactions.
Why did they choose the new year? Because of the famous Chinese tradition in Malaysia called Ang Pow.
During Chinese New Year in Malaysia, married adults present Ang Pow (red packets containing an auspicious number of crisp new banknotes) to children, teenagers, and unmarried adults.
Standard Chartered Bank Malaysia Berhad (SMBMB) invited customers to shake an Ang Pao and win prizes such as
Daily grand prize worth RM4,800
1 year of prizes on groceries, petrol, shopping, and bill payments (up to RM19,200)
Daily cashback up to RM99
The bank designed its gamification in a smart way to increase its credit card transactions.
Here’s how.
Customers had to register on the SCBMB website and spend a minimum of RM100 in a single retail transaction using their credit cards within the campaign period
Upon this, they’d receive a link to play Shake and Win via SMS
Customers would have to swipe left and right and shake the Ang Pow bag to win prizes.
The campaign was a success and the bank enjoyed an impressive rise in customers’ credit card spending.
3. Dupaco Credit Union Check-In Rewards
Since childhood, I’ve been a huge fan of the popular Doraemon cartoon and when I came across Dupaco’s gamification, I couldn’t help but remember a special cat episode called ‘Come Come Cat’.
Yes, in that episode, Doraemon makes a restaurant owner adopt a stranded cat by turning her into a lucky cat that can attract customers to the restaurant.
Dupaco Credit Union, a non-profit financial cooperative that helps members save money with lower loan rates, financial education, etc, did something similar when they used Foursquare to increase branch visits.
Foursquare is a gamified GPS-based platform that rewards users with badges, stickers, and points for checking into new places. It grew to 10 million users in 2009.
The union used this location-based social media app to reward customers for visiting 12 of their branches in Iowa, Illinois, and Wisconsin.
They rewarded visitors based on their number of visits by using game elements like prizes, titles, and leaderboards.
For the first-time check-in, customers got a free Koozie (can holders).
With every check into the Foursquare system, participants became eligible for a weekly draw to win a $50 gas card.
For the first 10 visitors every Wednesday of September, the bank gave special freebies.
Customers who checked in enough would get 'Mayor' of the location title and have their names featured on Dupaco’s electronic billboards and branch signage.
This check-in-based rewards campaign got such good engagement that 26 times check-in by one of the visitors to her favorite branch in 60 days.
Ready to Win the Game of Loans?
With various lending tech companies out there, battling in the game to win customers, their engagement, and loyalty, it's the need of the hour to switch to unique ideas.
But how does one get all their rolling in a jiffy? All those gamification use cases? This is where Flyy, a gamified SaaS tool, comes in.
We have helped companies like Kotak, CASHe, and more boost their customer acquisition, retention, and engagement.
Using our platform, you can launch gamified campaigns like refer and earn, daily check-in, leaderboard, spin the wheel, and more our plug-and-play SDK.
