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Financial technology (fintech) is opening up financial services to more and more people, but just because it makes it simpler to access services does not make those services simpler or less risky to use.
The launch of tech startup Tradelite is an attempt to address this through a financial services game development platform.
It brings together two of the biggest sectors in the world through a platform that enables game developers to use live financial market data. Once developed, games on the platform will educate users in navigating the real financial markets without the associated risks.
Tradelite, which was launched this month, was a concept in 2019, with specification and development of its financial entertainment (FE) platform beginning early last year.
The platform, which will be used by game developers, uses real financial data from exchanges and licensed financial data providers around the world in the same way as any other financial services institution would.
It will create an ecosystem of game developers, game publishers, publishers specialising in financial services and financial services providers such as banks.
Founder Matthias Kröner told Computer Weekly: “The ingestion, processing and transformation for further utilisation of this financial data is the daily business of any bank and broker. Our experience and expertise from the financial sector enable our financial entertainment game mechanics.”
The motivation for the venture was that gaming should be used as a tool to transfer knowledge in the finance sector.
Kröner said amateur traders in financial markets are currently just gambling because they have little understanding of how things work.
Also, there is an increasing number of unskilled and untrained people with easy-to-access trading through digital consumerisation. “People are interested in the market and the money – just look at the irrational behaviour around cryptocurrency, and the boom of trading on Robinhood,” said Kröner. “But these people need to be trained.”
Kröner was an early pioneer of digital banking, setting up Fidor Bank in 2007. It was later sold to French banking giant BPCE.
But it was during his time at a discount brokerage bank in the mid-1990s when he first saw at first-hand the risks that unskilled people were taking in the financial markets. “The discount brokerage idea was to make it easier to access the equity of companies, but people gambled on it,” he said. “I thought if people want to gamble, OK, I am not here to educate.”
But Tradelite is now providing the tech platform and market expertise to make this education possible, which is often ignored, said Kröner.
“Banks are not willing to educate customers, people do not read books, schools do not cover the topic, so people are left financially illiterate,” he said.
“Like a flight simulator trains you how to fly, these games will do the same, but for trading or other financial activities.”
But this is not gamification, Kröner stressed. “We think gamification is bad because it camouflages a real risk, which is not how it should be.”
Games do, however, create attractive and motivating environments for people to learn, practise, advance and to focus on the tasks at hand, he added. “The environment is created by setting concrete goals with manageable rules, by making sure the goals fit the players’ capabilities each step of the way, by providing clear and timely feedback to each action and result and by eliminating distractions with sensual and motivational drivers,” he said.
The interaction with games can also generate user data based on genuine behaviour rather than via traditional questionnaires, said Kröner. “Instead of asking people directly for their risk tolerance and making them select between the choices of very low, low, neutral, high or very high, a game can offer user interactive scenarios where users have to make choices and experience consequences. The recording of the user’s choices, reaction and progression over time would provide insights to the user’s risk appetite and tolerance.”
He said gaming environments can also be used to directly support users in completing complex, confusing, tedious tasks, such as going through the onboarding and know your customer process of a financial services provider. This will help prevent users dropping out of the process, providing incorrect information and from being blocked from a service because of user experience design failures.
Game developers pay to use the platform, creating a B2B marketplace for games, where publishers that subscribe can select the games for their audience.
It will use an as-a-service model with recurring fees, with revenue sharing with developers and publishers. Media houses dealing with financial publications are also a target user base.
Tradelite has already signed a partnership with a German media house, which publishes Der Aktionar (The Shareholder).