Saving money is not a game (but it could be)
Gamers today can spend countless hours and hundreds of dollars defeating dragons, storming strongholds or crushing candy on their mobile devices and personal computers — and one new fintech believes it can plug into the virtual pastime to level up consumer savings, too.
But the Blast app won’t try to create a game, as banks have done to try to entice savings, explained its creator Walter Cruttenden, co-founder of the popular microinvesting fintech Acorns.
In a twist on the gamification model, Blast users instead will be able to earn money by playing existing popular games such as League of Legends or Counter-Strike: Global Offensive. The money will go into a federally insured savings account provided by Wells Fargo earning 1% APY.
Financial services companies “are not game developers,” said Cruttenden. “It’s very difficult to come up with hit games and reach a wide audience.”
Here’s how it works: Users log into their Blast account and select the games they are playing. (The app works with nearly any game available in the Google Play store.) The account can be funded via PayPal or an existing checking account. The app then tracks accomplishments in those games, and the user is awarded money for achievements — amounts vary by accomplishment and game. For example, in the popular strategy game Clash Royale, a Blast user can earn $1 for destroying five castle towers.
Blast also has a “trigger save” feature that enables gamers to set goals based on in-game achievements such as enemies defeated, turrets destroyed and matches won in PC titles such as League of Legends or Counter-Strike: Global Offensive. The app also enables mobile gamers to save and win money automatically while playing virtually any other game.
Additionally, gamers compete for ranking on a Blast leaderboard through missions accomplished, with half of all users receiving a portion of the weekly leaderboard payout based on rank reached. The top tier can reach up to $10,000 each week. The payout schedule will be announced by top gamers and streamed on popular gaming site Twitch.tv.
Funding for the rewards that gamers can potentially earn will come from the video game companies, which in turn gain from increased gamer use; there are caps also on how much a Blast user can earn in a week.
“We’re not trying to change the habits of a gamer, but letting them continue to play the games they love while helping them save and invest,” said Armin Collosi, head of partnerships at Blast. “That’s our big differentiator.”
The idea of using techniques popularized in video games to create engagement and encourage customers to develop sound financial habits has been around in banking for several years. Gamification has been especially popular in the fintech world in recent years, and some banks, too, have added gamelike features to their mobile apps. But the key is getting customers to change their mobile habits and make it a routine to play your game on a regular basis, which can be difficult.
Cruttenden said traditional financial services firms have long tried to figure out gamification to no avail, largely because they focused on creating their own games.
“We always talked about gamifying at E-Trade" — Cruttenden previously led the online investment bank arm of E-Trade — "and still today at all the major firms, they’re trying to figure out how to make this work,” he added. “So we thought: Let’s turn the equation on its head and make all games investable. We spent about year figuring out the tech; the recent advances and cost reductions in micropayments and transfers makes this possible.”
Blast last week closed a $5 million seed round, with investors including the Forbes and Roth families, Core Innovation Capital, Great Oaks Venture Capital, Snowmass Private Equity and Wilson Sonsini Goodrich & Rosati. The funds will carry the company through its current beta program and launch, which is expected to take place early in the second quarter.
Right now Blast will start with the savings account, but Cruttenden said it will seek partnerships with any traditional financial firm that wants to link its accounts with Blast. “We prefer to look at partnerships with any of the big firms out there,” he said.
Gamification “is something I don’t think banks have really tapped into all that much” yet, said industry analyst Ed O’Brien.
O’Brien added there is an appetite among bank customers — especially the much-desired millennial demographic — to receive financial advice or help with savings and investing in a way that resembles a game process.
“I don’t know how much it has taken off yet,” added O’Brien.
Gamification may not be the deciding factor in why a customer chooses or sticks with a banking relationship, but can help build up a habit of engagement, said Dan Latimore, senior vice president of Celent’s banking practice.
“Using elements of gamification to engage with the customer can be pleasant and provide a good feeling of customer experience banks typically don’t always have,” he said. “It can turn interactions with a financial institution into something pleasant rather than unpleasant, and that’s a good thing."
The biggest obstacle to the widespread success of gamification has been the difficulty in getting consumers to change their gaming habits, something Blast aims to bypass by linking with games they already play rather than trying to get them to play a new one. For financial institutions, partnering with a fintech like Blast can help reach new customers, but they have to develop a relationship with those customers.
“I like the idea of engaging with customers where they already are,” Latimore said. “The key [for financial institutions] is to get them not just engaging with the Blast app, but then engaging with you as well.”