A new videogame has its hooks into Brian Kealer, a 26-year-old San Francisco software engineer. He’s not killing birds or using his vocabulary to impress his friends. No, Kealer is after real prizes, like the iPad2 he just scored. And he’s playing with his bank account.

At least once a day, Kealer signs into SaveUp.com, a new financial website, and does some financial activity that wins him credits he can use to play for big money prizes. To earn those credits, he can pay a credit card bill, deposit money into his savings account, or watch a sponsored video about personal finance.

To be clear, Kealer’s not making any real dollar bets; he’s just paying his bills. But by participating in SaveUp, he is playing into the financial services industry’s latest attempts to attract and keep consumers. Call it, inelegantly, “gamification”. It involves the use of game-like attributes and mechanics – contests, prizes, scorecards, badges, friendly competitions and the like – to make the boring business of money more appealing to hard-to-snag consumers.

“It’s a word everybody hates, but it is descriptive of what’s going on,” says Jim Bruene of Netbanker, a banking technology consulting firm.

Financial firms are turning to games to attract a younger demographic that may be impervious to advertising. Online games afford banks a cheaper way to attract customers in an era when interest rates on savings are practically nil, debit card fees are capped and banks have small margins and little leeway to throw rewards at consumers.

“It doesn’t cost much” for bankers to market this way, he says. And the ability to push games out in smart phone and tablet applications probably contributes to the interest, too.

But financial games may have a more serious social purpose too: Some policymakers believe that bank-run lotteries can encourage lower-income earners to save more money.

Of course, it’s not just banks that are “gamifying”. Zynga, the company that creates social network games like Farmville and Mafia Wars, raised $1 billion (R8.15bn) in its recent public offering on the expectation that its commercial tie-ins with companies like Pizza Hut and Paramount Pictures would pull real cash from the 200 million monthly active users the company claims. Web network marketing companies like Groupon and FourSquare offer badges, crowns and other awards.

Gamification is a $100 million market that should grow to $2.8bn by 2016, according to M2 Research, an analysis firm in Encinitas, California, that is assessing the trend across the board. Another consulting firm, Gartner Inc, says it expects that by 2014 “more than 70 percent of Global 2000 organisations will have at least one gamified application”.

But because game attributes are hard to define these numbers can be dicey; it’s a little bit difficult to isolate what counts as gamification and where the profits come from. So loud is the buzz that Gartner recently placed gamification on its “hype cycle” – a list of technology trends – at a place where it is approaching the “peak of inflated expectations”.

Banks have been a little bit slower to come to the game table than other companies, perhaps worried that using frivolous games to market serious financial products would be perceived negatively.

But in 2011, CapitalOne did a promotion inside a couple of Zynga games, and credit card companies have been running sweepstake-like promotions for years. Since the early 2000s, for example, Visa has been running contests in which cardholders would be entered into lotteries every time they used their cards, for prizes like 100 times their purchase amount or a year’s worth of bills.

Currently, Chase is gamifying its bank account promotions; in the third quarter of 2011 it ran a $6 million sweepstake for customers who paid a Chase bill (like a mortgage or credit card) with a Chase cheque account.

The new players are a little bit different. SaveUp, a San Francisco startup, isn’t a bank – it’s an intermediary that hopes to attract banks as marketing clients, but consumers can play regardless of what bank they use.

Behind the games, SaveUp is an aggregator that claims to use the same technology as Mint.com to bring in user accounts from hundreds of financial institutions.

Another new intermediary firm, Bobber Interactive, has created “GoalCard” – a Facebook-linked debit card that lets users play games with friends to win rewards points that they can trade for cash prizes. Some of the games are financial literacy quizzes, and players who do well enough on them can graduate to a level that allows them to play “Credits and Debits”, a game that is bejewelled with dollar signs and piggy banks instead of emeralds and diamonds.

All the financial games get really serious when they have a higher policy purpose. A paper published a year ago by the National Bureau of Economic Research suggested that savings accounts with a lottery component could encourage low-income families to save more money. These prize-linked accounts, which offer savers a chance to win a specified (and potentially large) amount of money, are already offered in various countries, including many in Latin America and Europe. In Britain, the government issues Premium Bonds that pay off in lottery chances instead of interest.

“This is a well-tested product (and its ) appeal is fairly widespread,” the study’s authors, led by Melissa Kearney of the University of Maryland, concluded.

Prize-linked savings accounts were piloted in the US, starting in 2009, by a group of Michigan credit unions, and now some in Nebraska have launched a new “Save to Win” programme at the beginning of this year. Depositors who put at least $25 in a share certificate at a participating credit union will be entered into a draw.

Every $25 (up to $250 a month) is another entry. Monthly prizes range from $125 to $1 000 and there will be one $25 000 grand prize at the end of the year.

In the past two years, six states (Rhode Island, Nebraska, Washington, Maryland, Maine and North Carolina) have changed their laws to allow savings promotional raffles.

“No one can deny that people love lotteries,” Peter Orszag, President Obama’s first budget director, wrote in a Financial Times op ed last year.

“Let’s give savings accounts linked to lotteries a chance. It’s a gamble but it could well pay off handsomely.”

SaveUp, the site Kealer frequents, isn’t messing around. Its top prize is a $2 million annuity. It also has airline tickets, cars, scholarships and a $5 000 Apple gift card in the mix. Many of its prizes are furnished through sponsorships and they are all bonded and insured, according to CEO Priya Haji, who founded the start-up with Sammy Shreibati, an engineer who has worked on education products.

To win awards, customers sign up for the site, and link it to their bank and credit card accounts. Every time they save $10, they are entered with a chance to win. They get three chances to play every time they watch a sponsored educational video. Titles include Harnessing the Power of Mutual Funds, for example.

Haji sees gamification as a way to engage financial customers who might not be tempted by the usual pie charts. – Reuters

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