Gamification Gets Serious for Financial Services Compliance Training

Although gamification sounds like a lot of fun, it is becoming a serious business. In financial services, gamification is being used to attract new customers, explain complicated financial offerings and even train employees to meet regulatory compliance mandates.

By definition, gamification is the use of gaming techniques to enhance other types of computer-based interactions. For instance, a bank might use gamification to show new customers the benefits of opening a brokerage account, or an insurance company may use gamification to help explain the value of having apartment renter's insurance.

In the capital markets, firms are also using gamification to help with compliance training and to meet regulatory requirements. True Office, a year-old startup that gamifies regulatory compliance training, has had some success working with financial services companies to improve their compliance training effectiveness by using gamification.

Signaling the company's focus on the financial services space, it recently named Cristobal Conde, financial technology innovator and long-time SunGard president and CEO, as True Office's Executive Chairman.

"I have been fascinated by gamification," Conde told Wall Street & Technology in an interview. "For instance, if you someone to describe themselves, they always get it wrong. But if you ask them to describe themselves in seven words, or you turn it into a game, you get a much better answer. Games engage people in a way that conventional formats do not."

As CEO of SunGard from 1987 to 2011, Conde saw first hand how training often did not achieve the desired results, was tedious and how opportunities for greater learning were missed. "As a CEO, training was a missed opportunity," he says. "If you just respond to a question, most systems will believe that you are learning. Most standard compliance courses talk about the absolute minimum, just so the company won't get fined.

"But CEOs want to enforce core values when they have the opportunity to train employees," such as outlining what is and is not acceptable on topics that are above and beyond normal training, Conde adds. "By turning training into a game, you can reinforce what constitutes a model corporate citizen. Gamification is a Trojan horse. It starts out about compliance, but it can do much more than just the minimum compliance that most companies do now."

Conde came across True office through his involvement with the 2012 FinTech Innovation Lab, where he was Executive-in-Residence. The lab, which is run by the New York City Investment Fund and Accenture, supports the development of cutting edge technologies for the financial services industry in New York City.

[For more on the FinTech Innovation Lab, read Tech Innovators Focus On Big Data.]

"The FinTech Innovation Lab provided a unique opportunity for True Office to test its innovative approach to compliance training with senior leadership at a number of leading financial services firms," said Maria Gotsch, president and CEO of the New York City Investment Fund, in a press release. "Cris Conde brings deep industry experience to True Office and will be a great asset as the company expands further into the financial services sector."

True Office's product, which is currently being tested by three banks, allows firms to modify a portion of the training program, says Adam Sodowick, True Office's founder and CEO. "When we develop the product, such as anti-money laundering or insider trading, 75 percent is based on common regulations," says Sodowick, who started the company four years ago. "We create the common product and 25 percent is customized for the company."

In order to gamify the training program, True Office takes real-life examples from financial services compliance cases. "We take a 'Law and Order' ripped-from-the-headlines approach," Sodowick says. "By changing the way the training is delivered, employees are achieving higher retention and recall rates. There is a ton of research of how you retain information, and if you combine learning with a game and a story, the retention is much higher." For instance, school children show much higher retention rates when a lesson is combined with a game or a story, rather than just straight facts, Sodowick notes.

"Compliance training is one of the most despised areas in a company," Sodowick says. "Everyone just wants to get back to work. With True Office, an employee can complete the training, in many cases, in 10 minutes. When we do that over a large employee population, we create some very accurate risk curves. We can identify the high-risk individuals and the company can deal with that separately."

True Office's gamification tools can be accessed through a web browser or through a tablet or smart phone. "New form factors came into play and they are changing the way compliance training programs can be delivered," Sodowick says. "The consumerization of IT comes into play. The iPhone and iPad are prevalent in the enterprise. There is a generation coming into the workforce and game playing is part of their life." . Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio