What it takes to effect lasting improvements in customers’ money habits

Behavioural studies certainly provide us with more insights than ever about the triggers, deviations, and responses of the human brain – conscious or unconscious. 

Knowing how cognitive biases influence people’s financial habits, however, serves a bigger purpose than just satisfying a curious mind. They are essential to building value and competitive advantage to survive and thrive in the next paradigm of the banking industry.

A perfect storm 

Banking as we know it is changing faster and more abruptly than seen from the outside. Across the world, banks are facing four transformations that are remoulding the financial services industry:

a) Open Banking legislation that opens up access to the customer’s profile for third parties in a never before seen manner

b) New competitors of all sizes that are chipping away at established organizations 

c) A fracture in the value chain that risks commoditizing banking services, rendering banks as utilities as the underlying business model comes under pressure

d) An empowered customer who likes to shop around, compare options, feel valued and is happy to switch providers accordingly.


A perfect storm

In this new environment, previous customer satisfaction standards are no indication of what’s required going forward. The whiteboard must be wiped clean. 

Paradoxically, competing in this environment involves going back to the original purpose: helping people with money and enabling populations to live enriched, satisfying material lives. 

This shift in focus demands banks tap into human psychology to understand financial values, habits and their outcomes. 

A long-term approach to building better relationships

The mental biases we discussed in our blog on cognitive biases  (and others) influence financial behaviours and are fundamental to human nature. That’s why they’re unlikely to change anytime soon. What’s more, cultivating awareness of these mental biases is not easy and doesn’t come naturally to humans.

This is a great opportunity for banks to move away from Ease of Use as a design paradigm and to step in and design around helping customers build better financial habits. 

 There are two ways of doing this: 

1) By putting customers in control of their money and guiding them along the way, which is what some established banks are trying to do now 

2) By helping them overcome their cognitive biases, which challenger banks, forced to unlock more value, are getting increasingly better at.  

At first glance, it’s not difficult to add features such as spending analytics, real-time view of account balances, and a better user interface on mobile. While they do help create some awareness around money habits, these bells and whistles aren’t enough to make a difference where it counts: how people relate to and think of money. They’re just a different way to display information, their success predicated on customers knowing what to do and acting. 

The banks that capitalize on digitisation will be the ones to tackle the difficult part: improving financial habits by changing perceptions. This is the more difficult path to master because it requires understanding users’ profiles and designing specific, relevant user engagement strategies

When it comes to understanding users, the fintech world seems to follow one of two narratives:

i) The checklist, which entails using simplistic questionnaires to map the customer’s risk profile, motivators, and needs. This is particularly true in wealth management but also prevalent budgeting and savings apps. The trouble with this approach is that it feels like agreeing to the terms of service. Customers often mindlessly fill in the info because it feels like another form to get over. 

At the other end of the spectrum there is a different approach.  

ii) Hyper-personalization is a highly complex undertaking which involves crunching massive amounts of data and using AI and machine learning to create the most accurate profile and dynamic journey for each customer. This data-hungry method certainly sounds good but it is a work in progress for various reasons: the process is too complicated, the tech is still under development, there’s a massive shortage of skilled specialists, and privacy issues remain unresolved. Furthermore, in crunching data sets that incorporate our inherent biases, these AI techniques at best reflect our psychological flaws and, at worst, magnify them. 

While hyper-personalization sounds like the solution banks need in today’s environment, it’s not as fast nor as reliable in the real world as they need it to be.

Taking the middle ground

Banks that want to advance their understanding of customers’ needs and habits don’t have to settle for simplistic methods or wait until someone figures out hyper-personalization. They can opt for an approach that combines sophistication and viability: user profiling using game-design principles.

Drawing heavily from human psychology, this method defines a Player Archetype for each customer. Fleshing out user profiles for banking services (i.e. “the tactician”, “the socializer”, “the immersionist”, “the architect”, “the saviour”, “the competitor”, etc.) becomes a workable solution.

While games still carry an often underserved stigma, industry outsiders tend to forget the gaming industry was and is built with the participation of behavioural economists. That is why we focus on game as an architecture at Moroku: because we believe in its ability to help bank customers develop a trained response to triggers that favour them in the long term.  

By embedding feedback, cues, rewards, group dynamics, and other game design principles that act as a set of guard rails into their products, banks can build a reliable long-term strategy to build a deeper, stronger relationship with their customers. 

That’s because each of us needs tools and support to correct our financial behaviours and the attached biases in a way that recognizes the vast array of eccentricities and differences in the great mosaic of the customer base. As Dan Ariely suggests“What mechanism can you create that will not let you act on your impulses?” coupled with a recognition that not everyone wants to or should lead a perfect life, based on some banker’s view of normal and perfect.

Employing game as an architecture to improve banking products taps into Mihaly Csikszentmihalyi’s flow theory. This approach explains how completing tasks that perfectly challenge a person’s skills can put them in a state of engagement, defined as flow. 

When game mechanics are applied within the flow of money habits, financial service providers can actively engage customers in the process of overcoming their own biases. In this model, users are guided through challenges, with clear feedback as they cross through “win states” as they skill up and become able to take on newer challenges. As this occurs the motivation to develop better money habits becomes intrinsic instead of it being perceived as an external prompt that triggers anxiety.

Financial services that employ game architectures help customers gain personal satisfaction and become intrinsically motivated to win financially. Nudging the customer with small challenges designed to be just above their skill level creates engagement and correlates banking with positive personal development.

To sum up, the main ways banks and financial services providers can place game-design at the heart of the their products and services result in a few core benefits: 

a) Merging of self-awareness and action

b) The experience becomes intrinsically rewarding

c) Combining clarity of goals and rewards with immediate feedback for customers’ actions 

d) Giving customers a feeling of control over the task. 

Let’s see how this works in the real world. 

Moroku – the Nudge Engine for a better choice architecture 

Moroku Odyssey, was envisioned as a Nudge Engine, built to guide customers towards better financial behaviours using cues and indirect suggestions. 

Nudges are a widely studied concept in behavioural science and both private and public organizations have been using them increasingly often over the last few years. Deloitte reports that “more than 200 public entities worldwide apply behavioural insights” to help improve customers’ and citizens’ habits regarding aspects such as energy consumption or pension savings. 

For example, the UK was the first country to have a “nudge unit” within government, the Behavioural Insights Team (BIT). In their 2017-2018 report, BIT shares results they’ve achieved while testing nudges in various scenarios. 

In one experiment, they focused on increasing credit card repayments, using a slide-ruler repayment interface to give consumers extra information about interest costs and total repayment amounts. The result: people with the slide-ruler increased repayments by 15% relative to a control group. With total credit card debt at its highest point ever, surpassing $1 trillion in the US alone, the impact is significant.

In another example, the U.K. tax department (HM Revenue and Customs), modified the notification letters they sent people who didn’t pay their tax on time with the help of BIT. 

The success of this experiment triggered a second application and an extension to other countries as well. Financial service providers can use economic nudges to do the same – or more – for their customers. 

For example, banks can introduce savings reminders coupled with messaging that delivers an instant reward to reduce recency bias. Reminding customers to look at the big picture and celebrating progress towards a savings goal can have a powerful effect and help them ignore current temptations to spend. 

Providing a constant stream of financial education nuggets can help people make a habit of asking themselves: 

“Of all of the things I can buy or otherwise do with this money, is this the best I can do?” 

Day after day, this type of reflection can be the architect of consistently better choices.

To help people combat loss aversion and select their future wellbeing over their present gratification, instant rewards are required, such as reaching a milestone or being granted a level upgrade. Such rewards can come in many forms and aren’t necessarily extrinsic points and prizes that sit on a balance sheet and are never valued.

Inherent game-design can provide all these benefits and more to financial organizations looking to cultivate a strong brand that’s deeply anchored to their customers’ lives. This is possible because, at Moroku, we go beyond automating specific behaviours and focus on engaging customers in their financial decisions

Voluntary actions have a bigger return than simple automation, as proven by several reports and studies

This approach can play a fundamental role in a bank’s broader strategy – along with inclusion, financial responsibility, and customer success – to help people solve real problems and improve their decision-making abilities not just for money issues, but for other aspects of life as well. 

To achieve this, we provide full support and control over which elements banks find the most helpful for their products and services. 

The Moroku GameSystem includes over 30 mechanics that developers can consume to build custom player journeys and capabilities. Developers can use several GameSystem APIs, such as Challenges, Competitions, Goals, Groups, Rewards, and Skills, to create an immersive experience for selected bank products and services.


The industry-wide transformation is an opportunity for banks to return to purpose by reshaping financial habits, fighting against mental biases and uncovering new value by changing how they build and nurture customer relationships. Our goal is to use our expertise and experience to help banks and their customers navigate this paradigm shift. 

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Digital is rapidly commoditising banking around the world, forcing participants to compete on margin erosion and funding. In the new engagement economy, there is an alternative: Harness the power of game to build digital experiences that deepen customer relationships, provide value and are relevant by supporting customers to thrive with their money.