Exploring the Effects of Gamification in Banking: A Perspective

Major banks are concerned about the rising competition and dropping customer engagement. Can gamified user experiences save the day? Let’s find out.
December 21, 2023

When PNC Bank launched their ‘Punch the Pig’ gamified campaign in the 2000s, it was a move to promote their virtual wallet and as a player said, “was a different way of getting the point across.” The point for the customers (and players) being: to instil a habit of saving. For the bank it was an engagement tool for customers and non-customers while promoting their virtual wallet. In a 2008 report, the bank claimed that within five months of its launch, over 12,000 Virtual Wallet accounts were opened, averaging at over 200 new customers every day. Several factors were at play, but the viral element of the game played a major role in its success. No wonder the feature is still very much an integral one in PNC’s virtual wallet.

The Premise

A 2020 Forbes article revealed that 93% of people used mobile banking to only check their account balance. That drastically changed after COVID-19 spread, forcing people towards digitization. However, a study showed that 23% of the customers who adopted digital banking channels during the pandemic said they would prefer to return to in-branch banking once things returned to normal. Three years later, banks are still exploring ways to give their customers reason to adopt online banking channels and spend more time there. 

The Indian Context

In India, digital transactions rose from ₹2,071 crore to ₹9,192 crore between FY18 and FY23. But there has been no significant drop in the number of customers still visiting bank branches. While online banking is here to stay, most banks agree that account holders physically visit the banks looking for the human touch. Private banks like Axis Bank and HDFC Bank are in no rush to force digitization, reduce physical branches or ATMs at the moment. Instead, they are doubling down on the physical banking aspect by opening branches outside metro and Tier-1 cities. But the same is not true for public sector banks (PSBs). According to the All India Bank Employees’ Association (AIBEA), PSBs had 88,265 branches in FY20-21 but it fell to 86,221 in FY21-22. Much of it has been attributed to mergers and rationalisation of branches. 

Triple Jeopardy

Maintaining person-to-person banking channels costs banks more than digital channels.

Rise in digital banking adoption means reduced cost of operation for banks. The resources allocated to simple banking tasks like withdrawal, deposit or transfer can be handled by/between the customers directly. Rationalisation prompts banks to review what matters most to them and the market they operate in. So, banks may decide to close branches if the cost of operating is higher than the revenue generated from such branches. That would mean replacing it with digital banking channels. And that is when things start getting tricky.

Non-banking financial companies (NBFCs) are able to acquire a large chunk of customers with their superior user experience and this shift in the customer dynamics shook the foundation of customer loyalty, which is integral in any bank-customer relationship. Especially, the tech-savvy generation is unforgiving when it comes to customer experience and quite experimental in handling money. That does not mean they are careless about where they put their money in. Instead they are way too sceptical when it comes to trusting any kind of financial institution. But it clearly means that traditional banks now face great competition from the NBFCs with attractive offers and user experience. 

Similarly, when it comes to engaging customers via digital channels, banks often underperform owing to clunky and convoluted interfaces. With such fundamental shortcomings, it becomes very difficult to perform simple tasks, let alone upsell or cross sell products to generate additional revenue. Brand partnerships can never see the light of day as low daily active users (DAU), lower engagement and higher churn are seldom indicative of platform success. So the problem in front of Indian banks is threefold, starting with onboarding new customers, moving to engaging them and settling with retaining the old ones.

The case for Gamification

The gamification industry growing at a CAGR of 27.4%, the market size for it is expected to reach $30.7 billion by 2025.

Attempting to trace back the origins of gamification in the wider context can be a futile exercise in the context of this article. Application of game-like elements with equal parts of motivations and rewards in non-game environments has existed forever. It was just a matter of time it influenced the online world as we see it now. Numerous studies point to the fact that gamification is directly related to productivity. This has a lot to do with substituting the feeling of mundaneness with a sense of purpose or anticipation of reward. Be it in education/training or banking, the results acquired from studies support these claims.

A 2020 study, ‘Application of Gamification in the Banking Sector: A Systematic Review’ talks about the fundamentals of gamification and how it fits with e-banking. It found a positive relationship between gamification in banking apps, and customer motivation and loyalty.The study, however, emphasised the importance of a well-designed gamification experience for positive outcomes.

Another study from 2019 talks about how gamification directly and positively impacts the engagement and virality factors. This is also evident from the PNC Bank campaign ‘Punch the Pig’ which not only popularised their Virtual Wallet feature but paved the way for other banks to experiment with gamification.

Banco Bilbao Vizcaya Argentaria, popularly known by the acronym BBVA is a Spanish multinational financial services that had its fair share of virality out of a gamified banking feature. BBVA launched a gaming platform which allowed customers to interact with educational videos. In return, customers could win music downloads, movie tickets, or tickets to BBVA La Liga football matches. Reports claim this helped them push their customers through their funnel to learn more about their products and expand their banking needs. 

Results from this gamification effort paid well for BBVA when in 2013 it won the ‘Bank Innovation Awards’. A BBVA spokesperson claimed that the game attracted more than 100,000 players in the first six months of its launch. As the focus was on educational, web functionality and bank product video views, they noticed that the number of views grew 16 times in nine months as compared to the preceding 12 months.From a user satisfaction point of view, users who participated in the gamified experience registered 18% higher satisfaction than the non-gamified experience users. Verification data completion rates saw five times more completion in the gamified experience than non-gamified experiences. Examples like such are plenty, building a good case for gamification and its adoption by the banking industry. 

With the gamification industry growing at a CAGR of 27.4%, the market size for it is expected to reach $30.7 billion by 2025 as opposed to $9.1 billion in 2020. More than 70% of banks from the Global 2000 list use gamified elements in their digital channels in some way or other, generating a value of $12.25 billion in 2021.

Gamification not for gamification’s sake

As much as gamification has the capability to positively impact banks’ engagement and customer retention metrics, it should always be preceded by a well-thought out mapping of customer value and bank’s requirements. While innovation lies at the centre of gamification, it should also be aligned with the priorities of the banks, its customers and other stakeholders (if any). 

Poor game design is the leading factor for failed gamification. So, once the priorities are aligned, the game objectives, rules, economy and reward systems need to be laid out. Each customer has a different motivation if gamification experiences are considered in general. So, it is absolutely important to understand the motivation of the target audience and gamify the experience around that. A good game plan can help banks to capitalise on those user motivations. A good example of it is the UPI-enabled GooglePay.

Upon launch, GooglePay offered cashbacks to its users often after money transfer/receipt. These cashbacks were revealed when digital scratch cards were scratched. They also have a referral program where users can invite other people to join GooglePay and in return earn cashbacks. These methods helped the app to become viral among the Indian audience, in turn bringing in more users to their fold. Soon other applications followed suit. Eventually, Amazon Pay (138 million users) gained the momentum to overtake Google Pay (123 million users).

To sum it up, gamification helps bank in:

  • Increasing customer engagement with mobile and e-banking channels
  • Boosting customer loyalty across all customer segments
  • Reducing physical operation costs
  • Simplifying complex banking concepts for all customers
  • Spreading awareness about bank’s new services and products
  • Promoting financial literacy
  • Inculcating positive banking habits
  • Providing personalised experiences
  • Earning Reserve Bank of India’s ease points


Cheggout being the top customer engagement solution helps banks engage and retain customers at scale, and gamifying the banking experience is right down the alley for us. 

With more than 70% of Indians using online banking channels and India’s more than 50% internet penetration, banks are at a juncture where customer-bank relationship is evolving massively. Added to it is the Reserve Bank of India’s push to digitise the banking industry, competition from NBFCs and changing taste and preferences of the Indian populace. With such massive factors at play, gamification might seem like a minor piece of the puzzle but it is nonetheless a pivotal one. So, can gamification save the day? Let’s wait and watch.