The use of digital gamification to improve money management

Abstract

South Africa is going through one of its most economically turbulent times in its history. This is compounded by worldwide economic instability. Increases in prices, unemployment, poverty, and failure of infrastructure has made it difficult for a large part of the population to make ends meet. It is therefore vital that South Africans become more financially literate and manage their money better. However, even on an individual level, individual financial literacy rates and levels of good money management practices in the country are low. Gamification has proven to be an effective way of educating and driving positive behaviour. Gamification is the use of the psychological and motivational factors that are influential in people playing games, in other real-life contexts. This study focuses on answering the question, to what extent can gamification be used to encourage people to improve their financial literacy and money management abilities to be able to improve their financial situation? To answer the research question a qualitative study was conducted. This involved interviewing twenty individuals to understand what challenges they face in managing their money well, what factors contribute to their current levels of financial literacy, and to understand what core drivers of gamification, as described in the Gamification Framework Octalysis, would motivate them to learn more about financial literacy and manage their money well. The study identified twelve challenges which affected the way in which participants manage their money well: 1) Lacking knowledge or education, 2) Personal circumstance or goals not catered for, 3) Financial jargon, 4) Lacking discipline, 5) Increasing prices/cost of living, 6) Low salary or not having enough money to manage, 7) Taking care of family members, 8) Unexpected costs or emergencies, 9) Fear of their current situation, 10) Lack of interest, 12) Having an overview of their finances, and 12) Lack of trust or comfortability with banks or financial institutions. It was shown through literature that gamification can have, or already has, a positive impact on eight of those challenges, with the other four challenges being external to the motivation of the individual. The study also identified ten factors that contributed towards the participants’ level of financial literacy: 1) Information from family and friends, 2) Information from financial advisors and bankers, 3) Life experiences, 4) Information gathered when a trigger or life event occurs, 5) Searching online/online articles, 6) Social media, 7) Learning through their jobs, 8) Banking or other financial institution applications, 9) Reading books, and 10) Online videos and podcasts. However, it was shown that these factors are not sustainable, accurate or consistent to progressively improve financial literacy. It was shown that more accredited and centralised sources of financial literacy need to be developed. This study has shown that “Development and Accomplishment” and “Empowerment of Creativity and Feedback” were the most important core drivers to the participants. However, it was also identified that other core drivers also need to be implemented in gamified solutions to ensure that individuals’ personalities are catered for. Lastly, it was shown that gamification can have an impact on improving financial literacy and money management in South Africa; however, it cannot be the only solution. It will need to be a part of a bigger, centralised and accredited solution that accounts for personalised circumstances of the individuals, the personality of individuals and their financial situation