Don’t Make These Three Customer Engagement Mistakes
In a previous handbook, we detailed four ways for banks to engage their users. What about what not to do? Here are three actions we do not recommend:
1. Create trading gamification incentives
Incorporating gamification elements into your banking platform to make investing fun and rewarding may seem like a plus, however, it is extremely tricky to implement in practice. There are many regulatory rules in every country that prevent this sort of gamification in order to protect retail investors – investors need to know they are investing real money and that each transaction has financial consequences. We advise banks to avoid trying to integrate challenges, badges, and leader boards to encourage a boost in transactions as this will most likely get shut down by regulators. This year online brokerage Robinhood had to pay a $7.5M USD fine in a settlement with Massachusetts' securities regulators, who say that it encouraged inexperienced investors to place risky trades.
2. Integrate copy trading
Copy trading, or the automatic replication of trades from traders without the need for social interaction or decision-making, can be tempting as it helps investors diversify their portfolios and in theory gives a bank more opportunity to collect trade fees. (It should not be confused with social trading or social investing, which involves a community where traders actively share information and insights, fostering a collaborative environment.) The risks, however, outweigh these benefits and therefore we advise banks to steer clear of this. Not only is it a hands-off method (this will not encourage actual engagement in the platform), but it is also risky for investors. Investors have different risk tolerances, past performance does not guarantee future results, not everyone has the same access to information – these are just some of the reasons why copy trading is dicey.
3. Do nothing
Of course, you have the option to not change anything and hope for the best. We don’t suggest this and chances are, your user engagement will not only just stay stagnant, but also decline over time as users flock to competitor platforms that fit their needs and expectations!
One Last Thought
Now that you have an idea of what to do (and avoid), we have one final thought to share – when deciding which action to take, don’t forget to get real feedback on your bank’s products and services. Sometimes, allowing users to give their opinion on their experience gives you all the information you need to improve your app. This can help banks understand the needs and preferences of their customers, which will guide them to make necessary changes to keep users engaged.
