Unless you’ve been on a strict media fast of late, there’s no way you could avoid seeing the blizzard of commentary about the Pokémon Go craze taking over much of the world. Augmented reality and its promise to change customer engagement through gamification can be seen in this offering from Niantic Labs, which has millions of people running around their communities seeking to catch and collect the various Pokémon characters that “appear” within physical surroundings. While gamification’s potential impact on financial services has been widely hypothesized, as this article and this release have suggested, something tells me the reality will be quite a bit less remarkable. In all likelihood, the big consumer brands will lead the way, with the financial services players and the underlying payments capabilities they offer hard-pressed to keep pace. This is not all surprising, since creating a fun marketing campaign is a whole lot easier than wading into the minutiae of financial products, technical architectures and mobile device (in)compatibilities.
This does not have to be the case. Witness WeChat’s virtual red envelopes, which made a competitive, social game of the tradition of giving small sums of yuan. Over 8 billion envelopes were exchanged during the past lunar new year holiday, driving adoption of over 200 million WeChat wallets to make it a formidable competitor to wallet market-leader Alipay, all in a two year period. In a nutshell, the fun-quotient drove adoption. Imagine mastering your budget with Citémon? Refinancing your mortgage with Wélls Fargomon?
A clear rejoinder would be that a major bank could not be expected to perform as swiftly as a loosely-regulated fintech insurgent. Nevertheless, also clear is that the trajectory of Pokémon Go, and its inevitable inheritors, is measured in days, while traditional bank product rollouts are measured in quarters. Each day waiting means missing out on commercial opportunities and risking product delivery post-crest.
The incumbent financial institutions must do better if they are to survive for any reason other than their advantageous access to long-term capital. They need to rethink their approach to new product rollouts; they need to reconceive their enabling technology architectures. Until then, you’ll find me catching my Pokémon courtesy of such institutions as McDonald’s.
Marvin Chang is the Global Head of Loans at First Data Corp.
(All views in this article are my own)