How to implement loyalty programs and gamification in fintech products

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Customer loyalty is one of the critical metrics for fintech. Delivering reliable service doesn’t make the cut anymore. You have to enhance user engagement to make sure customers will stay with your brand. One way to achieve this is by incorporating elements of gamification and loyalty programs in your fintech platform.  

In this blog post, we'll explore the way loyalty programs and gamification work together to provide actionable insights for professionals looking to level up their fintech platform. To give you more context about implementing loyalty and gamification in fintech, we decided to illustrate the process with the real-life story of Ugami. 

Our example: Ugami case study 

Ugami is a pioneering fintech firm from the U.S. They wanted to redefine the industry with a gamified loyalty program centered around debit cards designed for the gaming community. 

They decided to leverage Open Loyalty as the core of their gamification mechanics. It’s a loyalty platform that started at Cloudflight, formerly Divante, and can seamlessly integrate with modern financial services architecture. 

The goal was clear: enrich Ugami’s financial services with an interactive and mobile-centric loyalty experience to set a new standard for the industry.  

Requirements to adopt a loyalty program in fintech 

Implementing a loyalty program within a fintech company usually requires two essential elements: 

  • A deep understanding of your customer journey to pinpoint and enhance desired actions that connect them to the brand. The more insights you have, the better. An efficient loyalty program needs a customized approach and a feedback loop to guide users toward crucial actions. 
  • A modern IT architecture that allows you to integrate with loyalty platforms. While it isn’t crucial, it makes the whole process easier and more efficient.  

In the case of Ugami, the core insight was that there’s no better target group for gamification than gamers themselves. Additionally, this audience is well aware of how expensive their hobby might be. We’re talking about the games and the pricey gaming equipment they already buy. Awareness of those costs paves the way for the Ugami Debit Card with a multi-merchant loyalty program for gamers.  

Regarding IT architecture, Ugami chose Open Loyalty as a solution that’ll be easy to integrate with their system. The API-first approach allowed the platform to connect them seamlessly. 

loyalty banner

Potential loyalty features in fintech 

There’s a couple of loyalty features that prove to be a good fit for fintech companies and their users:  

Earning points for using a debit card 

The ability to earn points for using a debit card transforms routine financial transactions into rewarding experiences by creating a relationship between user engagement and loyalty. Every transaction becomes an opportunity for users to accumulate points.  

This not only incentivizes regular debit card usage but also enhances the overall user experience because customers perceive tangible benefits from their routine spending. The simplicity and direct correlation between usage and rewards make it an effective strategy for building customer loyalty. 

Earning points for specific actions 

This feature rewards users for taking desired actions, such as referring friends, completing financial education modules, or setting up automated savings plans. You can tie points to strategic actions to encourage users to explore the features and create a dynamic and interactive user experience that enhances customer satisfaction and loyalty. As users accumulate points through various actions, the platform becomes an integral part of their financial journey. 

Mobile loyalty features 

Mobile loyalty features leverage the pervasiveness of smartphones to engage users on the go by ensuring that loyalty benefits are at their fingertips. This includes real-time notifications about earned points, personalized offers, and exclusive promotions tailored to users' financial behaviors.  

To explore this topic further, check out 3 key elements of modern loyalty programs for mobile banking. 

Tiers for certain levels of engagement 

Implementing a tiered loyalty structure is a strategic move that adds depth and progression to loyalty programs. Those levels create a sense of achievement and exclusivity. Each tier can come with perks, rewards, and privileges that motivate users to ascend to higher levels through increased engagement.  

This tiered approach encourages consistent usage. At the same time, it acknowledges and appreciates loyal customers with enhanced benefits. As users climb the loyalty ladder, it fosters a community of dedicated and enthusiastic participants who find value in their ongoing relationship with your brand. 

Daily, weekly, and monthly streaks 

By rewarding users for consecutive days, weeks, or months of interaction with the platform, fintech companies encourage habitual usage and instill a sense of discipline and commitment. These streak-based rewards create a dynamic rhythm in user behavior by making the loyalty program integral to their financial routines.  

As any mobile gamer knows, users who maintain streaks feel a sense of accomplishment while those who may have lapsed are motivated to resume their streaks. This enhances overall program engagement. This gamified approach transforms loyalty into a continuous journey where users are incentivized to sustain their streaks by creating a habit-forming and mutually beneficial relationship. 

Earning badges and achievements 

Unlocking achievements is a well-known gamification mechanic from gaming marketplaces, such as Steam. Fintech companies can tap into that and design a variety of badges to acknowledge specific milestones, such as reaching a savings goal, making a certain number of transactions, or exploring new features.   

Spin-the-wheel mechanic 

This feature allows users to spin a virtual wheel with each segment representing different rewards, discounts, or exclusive offers. Fintech companies can strategically use it to engage users by encouraging them to participate in the program regularly.  

The spin-the-wheel feature not only diversifies the types of rewards users can earn but also adds an element of surprise and randomness. This makes the loyalty program more engaging and entertaining for users. 

Redeeming perks and rewards 

Redeeming perks and rewards is a pivotal component of loyalty programs. Understanding the audience is crucial for creating desirable redeeming options that resonate with users. Whether earning points for using a debit card, completing specific actions, or maintaining streaks, the redemption phase becomes the culmination of the user journey.  

Fintech companies must invest time in researching and comprehending their user base's unique needs and aspirations to offer redemption options beyond generic incentives. The success of a loyalty program often hinges on the relevance and desirability of the redemption choices provided, making it a strategic consideration for fintech companies looking to maximize user satisfaction and loyalty. 

Fintech loyalty features on the example of Ugami 

Getting back to our example, the Ugami program rewards users for debit card transactions and in-app activities with two types of debit cards offering varying multipliers. It’s a base for a vast array of features that allow users to unlock achievements, participate in weekly sweepstakes, and redeem rewards from various brand stores via a user-friendly mobile app. The standout spin-the-wheel mechanic, tied to Ugami Debit Card transactions, provides additional Ugipoints and a chance at surprise prizes to enhance user motivation. 

The gamified system also includes badges and achievements, catering to users' gaming preferences, and promotes sustained participation by offering rewards for completing tasks and leveling up. This loyalty strategy reflects Ugami's deep understanding of its diverse user base by effectively combining financial solutions with gamification elements to maximize user impact. 

Ugami gamification

Checklist for introducing a fintech loyalty program 

Analyzing the Ugami case further, here are seven steps to smoothly implement loyalty and gamification features in a fintech platform:

1. Define clear objectives

Clearly outline the objectives you aim to achieve with loyalty and gamification strategies. Whether increasing user engagement, boosting transaction frequency, or expanding your user base, having defined goals will guide your implementation. 

Ugami came to the table with a clear vision of the new product and its features. It made it easy to define success and choose the right approach.

2. Understand your audience

Tailor your loyalty and gamification strategies to your target audience. Consider age, financial goals, and user preferences to create a personalized and practical experience. 

The target audience of Ugami was gamers. Creating their gamification mechanics was driven by the understanding that younger audiences now anticipate personalized and captivating financial interactions. Ugami adjusted features and communication to tie it to concepts familiar to this group. 

3. Choose the right rewards

Design a reward system that aligns with your users' interests. This could include cashback offers, exclusive discounts, or non-monetary rewards, like badges or status upgrades. The key is to make users feel a sense of achievement. 

All the Ugami rewards mentioned above were created with the target group in mind and were closely connected to what’s valuable to them. 

4. Integrate gamified elements

Identify touchpoints within your platform where gamification can be seamlessly integrated. This could involve setting up challenges, creating leaderboards, or introducing levels users can unlock as they engage more with your platform.  

In the case where gamification is a crucial element of a new product, as in Ugami, it’s a pretty straightforward process. Adding new features to an already existing product or service requires extra flexibility.

5. Utilize behavioral economics

Leverage principles from behavioral economics to nudge users towards desired behaviors. For example, use scarcity and urgency to encourage timely transactions or employ social proof to showcase the benefits of your platform. You’ll find multiple examples of this approach with Ugami. 

6. Invest in a seamless user experience

Ensure that the gamification elements help the overall user experience. The integration should be smooth and enhance the platform's usability rather than complicating it. As with Ugami, earning points for debit cards shouldn’t interfere with what the user wants to achieve at the moment, which is simply paying with their card. 

7. Analytics and iteration

Implement robust analytics to track user interactions and the effectiveness of your loyalty and gamification strategies. Use the insights gained to iterate and refine your approach continually. The data is crucial to success in building a solid loyalty program. 

Results of implementing the loyalty program in fintech 

Ugami's successful integration of Open Loyalty expanded the Ugami Debit Card with innovative loyalty and gamification mechanics that fostered user engagement.  

It resulted in the creation of a unique financial solution equipped with a reward program that empowers gamers to redeem points for various offerings, including games, merchandise, hardware, and software. By decentralizing the rewards program to collaborate with leading gaming and technology brands, the Ugami Debit Card extended its reach to a broad spectrum of gamers by fundamentally reshaping their experience.  

In April 2022, Ugami secured a substantial $4.8 million seed round that was propelled by the successful launch of the closed beta version of the Ugami Debit Card and its accompanying mobile app. This funding, led by Harlem Capital Partners and ULU Ventures and with participation from FJ Labs, Origins Fund, and Top Corner Capital, expedited the ongoing development of the reward system.  

Ugami debit cards have emerged as a tailored solution and have become the first debit card for gamers in the U.S. based on App Store download data. To commemorate this achievement, Ugami organized daily GPU Giveaway Days and offered up to 50% discounts on selected GPUs. This created an atmosphere of celebration for the fortunate winners.  

The loyalty program mechanics, strategically embedded in Ugami's overarching values and customer acquisition strategy, continue to evolve in collaboration with Open Loyalty. This is because both organizations are dedicated to enhancing the allure of the Ugipoints loyalty program for the gaming community. 

Why should you implement loyalty and gamification in fintech? 

The story of Ugami shows us that implementing loyalty and gamification strategies can set your fintech platform apart by creating a dynamic and engaging user experience. You can transform financial transactions into a captivating journey by understanding your audience, defining clear objectives, and leveraging behavioral principles. It keeps users coming back for more.  

The key to successfully introducing gamification and loyalty mechanics lies in creating a seamless and rewarding experience that aligns with your users' needs and aspirations. 

Published January 8, 2024