The gamification of everyday investing

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July 01 2021
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As the popularity of retail investing apps has grown, finance apps have become increasingly gamified.

Apps like Robin Hood, Stake and Superhero are making it easier for more people to be smart about their money.

However, the ways in which these apps simplify everyday investing can sometimes veer into a process called gamification.

Speaking to nestegg, Macquarie University’s Dr Rowan Tulloch described gamification as the use of video game mechanics and logics in non-game contexts.

A lecturer in Digital Culture at Macquarie University, Dr Tulloch said, “Video games are designed to effectively present information to players so they can make good split-second decisions. At their most basic, these apps are trying to do the same thing: efficiently give information to investors so they can make quick and beneficial decisions.”

The degree to which these kinds of apps gamify finance varies from subtle to more overt.

“For example, the prize wheel for referral on Stake is designed to make referring family and friends more exciting. Like a casino game, or loot boxes from video games, this is a proven, though not always popular technique, for increasing engagement and, in this case, generating extra referrals,” he said.

Like video games, Dr Tulloch said that a big part of gamification is providing users with “an immediate response”.

According to him, “this gives a sense of agency and power. You don’t fire a gun in a game and have to confirm in triplicate that that is what you really wanted to do.”

“These streamlined investment apps have learned that lesson, making the process of buying as quick and easy as possible. They want the user to feel a sense of direct agency and immediacy with the market, it increases the emotional connection the user has.”

Drawing a link between this new approach to finance and demographic shifts, Dr Tulloch said the popularity of these apps speaks to “a generation of investors who have grown up with video games.”

“They have a literacy in the ways video game present information. Learning from the ways games present information is a great strategy for apps trying to attract a younger generation of investors,” he said.

However, whether this gamification of finance is a good thing is more nebulous.

Dr Tulloch said, “Gamified finance apps can be beneficial for investors. Done well, it is about effectively giving investors information about what is happening in the sharemarket in an easily understood and followed way.

“However, elements that encourage rash investments, or that use addictive techniques to increase engagement, risk alienating users and damaging the app company’s brand.”

Dr Tulloch suggested that “the risk of gamified investment apps is that the immediacy they offer means that investors will not always be as diligent in their research into the companies they are investing in”.

“Spur of the moment investments are easier and, as such, more likely. That said, these apps are very good at presenting data and, as such, do try to offer investors a quickly and easily understood financial overview, to make their decision more informed.”

Looking forward, Dr Tulloch suggested that what we’re seeing today is just the tip of the iceberg when it comes to gamified finance apps.

“There is huge amount that can be learned from video games to make apps more immediate, engaging and exciting. What we’ll likely see, however, is a split between apps that use video game-inspired techniques in meaningful ways to enhance the user experience, and those that use the addictive properties and novelty of gaming system to increase their user base in the short term.”

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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