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Defined Contribution

App developers tap games to drive more savings

Long Game Savings’ Ashby Monk

Executives at startups such as Long Game Savings Inc. and MindBlown Labs see value in using games to drive positive savings behavior.

Launched about 18 months ago, the "Long Game Savings'' app uses games and cash prizes to encourage players to build their savings.

Players earn virtual coins for depositing money into their "Long Game Savings" account —an FDIC-insured savings account with Blue Ridge Bank.

Those coins are used to play games — like scratch-offs, slots and flipping cards — which offer the chance to win money — from a few cents to up to $1 million. Funding for the prizes comes a portion of the earnings the bank makes off deposits, the app explains.

The more real money players save through the app, the more coins they earn, and the more games they can play, said Ashby Monk, Long Game's co-founder and chairman. Mr. Monk also is executive and research director at the Stanford Global Projects Center.

Along with any money players win in the games, they earn 0.1% interest on their savings accounts. Players never lose their money and can withdraw their funds at any time.

When the app first launched, Mr. Monk said he and co-founder Lindsay Holden thought they were going to be spending a lot of time encouraging savings in individual retirement accounts and 401(k) plans. However, after digging into the user data, the team realized that putting money into an investment account was probably "not the best use of (the users') funds," Mr. Monk said. "They had debts ... student loan (debt) ... credit card (debt)."

"With the principle that you should be paying off the highest-interest debts first, we sort of realized that we probably need to move more toward encouraging proper financial behavior than just retirement planning, because there is no retirement planning until you can get yourself out of debt," Mr. Monk said.

Although "Long Game" now only supports savings accounts, Mr. Monk said the team is starting to talk to partners about incorporating investment accounts. He declined to identify the potential partners.

"If you create a powerful reward like the chance to win $1 million, you can expect people to do a lot to try to win that," Mr. Monk said.

The app has more than 100,000 accounts with players adding an average of $30 to their accounts each month. The average age of players is about 24 years old, Mr. Monk said.

To keep the app fresh, new games are added all the time, Mr. Monk said.

At MindBlown Labs, Washington, CEO and Chairman Jason Young and his team are partnering with record keepers to bring financial education games to retirement plan participants.

"If you look across different industries there are some really great examples of gamification and what it's been able to do — anywhere from science to armed forces to exercise, etc.," Mr. Young said.

In one of MindBlown's games — "Future Tense" — participants help characters reach their individual retirement goals by playing mini games with resource allocation decisions — for instance, whether to start investing earlier or later, or to invest money in a mutual fund or keep it in cash. Players get to see the consequences of their decisions.

In "Boom or Bust" — another game the company is working on — a player is given two avatars, one representing his or her future self and another representing the current self. Players make resource allocation decisions for their avatars — such as where they live and how often they dine out — by swiping right or left on playing cards.

Players see how their spending decisions and a retirement plan contribution rate set at the beginning affect the avatars' annual income (represented as a stack of coins).

Mr. Young declined to identify the record keepers his company is working with.

Along with driving financial literacy, Mr. Young said believes that gamification can help remove some of the stress around planning for retirement.