Life is not a game, but financial management increasingly is.
Most personal financial management providers use charts and social networking links to make financial services more fun for end users than the typical online banking site. Some PFM providers have said their site designs draw influence from games, but a Los Angeles start-up called Payoff.com LLC is taking this concept to the next level: it structured its service as an actual computer game.
The service, launched Jan. 5, requires users to first aggregate their financial accounts, then set goals, such as paying off debt, saving to start a business or funding a vacation. As consumers approach these goals, mapped out through clickable tabs that encourage learning about the best ways to save money or shrinking their bills, they win badges and are eligible for small cash prizes.
They can also interact with friends and family via Facebook and Twitter through the site.
"Consumers don't get [banking] lingo, and they don't think of things the way bankers do," Scott Saunders, Payoff's founder and chief executive and a former executive at Walz Group, a service outsource provider that helps banks communicate with defaulting customers, said.
His knowledge of this disconnect became the foundation for Payoff.com.
"Games, plus consumer finance, equals more consumer engagement," Saunders said. "That is the path we are going down."
Rather than trivialize personal financial management, game mechanics are in fact part of the DNA of many PFM offerings today. Experts said game setups will only increase in PFM and the banking world, as it shifts from more costly rewards programs to interactive setups that engage consumers more deeply based on their personal goals.
" 'Gamification' is a buzz word that has reached critical mass in the last six months," said Barry Kirk, vice president of consumer loyalty at Maritz Inc. in Fenton, Mo., which helps financial services companies construct loyalty programs and which has examined consumer behavior and games.
Kirk said that linking games and finances is not an entirely new concept, and in fact it has been a nonexplicit foundation for many loyalty programs for about 20 years. But in recent years, loyalty programs have lost customer appeal as social media has changed customer expectations.
"Consumers expect to engage in an experience, and to contribute to it, and engage with other consumers around it," Kirk said.
He said games create more customer engagement first because games are social and present an element of surprise.
"The brain lights up to things it didn't predict," Kirk said.
To this end, Saunders said Payoff users can randomly win cash prizes of between $25 and $75 as they meet their goals.
Similar lessons have not been lost on some of the other PFM providers, such as Bundle Corp. and Intuit Inc.'s Mint.com.
"We deliberately incorporated interactive, game-like elements into our application because we wanted to make our tools approachable for consumers who typically steer away from proactively managing their personal finances," said Phil Kim, the chief technology officer for Bundle, in New York."It's important for people to approach personal finances more like a game, so they don't dread going back to it."
Similarly, Stewart Langille, director of marketing for Intuit's personal finance group, said gaming "is something we see growing within PFM."
Some experts said games and PFM are not a good mix.
"Financial planning is not a game, it is the opposite," Jacob Jegher, senior analyst for Celent, said. "Can it be fun? Absolutely, but there has to be a knowledge transfer and education involved."
Kirk said that Payoff, which cross-sells products and services to its customers, has to be entirely transparent about that process.
Saunders said Payoff's website clearly states that it makes money through cross-selling, but he added that many of its partners make no money at all. "Our site is not really about pushing financial offers," Saunders said. "We view everything we cross-sell strategically, to help … [consumers] achieve their goals."
