Covid restrictions are preventing Annelise Murray, a 22-year-old English teacher in Hong Kong, from taking trips with her friends to Macau’s casinos . But she still recently managed to win big on a slot machine, walking away with HK$4,700 (US$600) – enough to cover the cost of a staycation she had just paid for at a 5-star hotel with her boyfriend, and leave her with HK$2,350 of spending money. She is not a member of an underground gambling ring. Rather, the machine in question was a virtual one on her mobile phone screen and all she did to get a shot at the prize was swipe her ZA Bank credit card. With backing from ZhongAn Insurance, ZA Bank was one of eight virtual banks launched in 2020. The app offers a range of rewards opportunities including virtual “quests” that guide users through banking features, products and services. However, the highest potential for earnings is through the PowerDraw, a game of chance which can award up to 200 per cent cashback for offline purchases made by credit card. Having used her ZA Bank card to pay on arrival at her staycation hotel, Murray was given the option to try her luck in the PowerDraw – a game that resembles the classic claw machines in amusement arcades. Moments later, she watched as a small claw on her screen picked up a capsule containing the top prize – a 200 per cent cash rebate on the HK$2,350 she had just spent. “I got the little notification asking to do the PowerDraw before it expired, and I clicked on it as I often do … prior to this, I’d never really won big and thought that the algorithm might prevent that from happening, but yeah, I got 200 per cent,” recalled Murray. “It made the rest of the trip very enjoyable, because we felt like we were being paid to be on vacation, and I told all my friends about it.” ZA Bank’s PowerDraw rebate is part of its “Be the Game Changer” campaign that has helped the company set itself apart in Hong Kong’s saturated banking sector. PowerDraw adds a level of excitement for customers. It also has the benefit of masking the bank’s average rebate on purchases because the amounts vary from customer to customer based on luck. This enables ZA Bank to stay out of rate wars with competitors. While virtual banks have mainly opted for digital-driven marketing strategies via social media, targeted ads, and referral schemes, ZA Bank views “gamification” as an additional way to build its brand through word of mouth. “I don’t think I would talk about getting a, say, 10 per cent rebate from a card, but with our model, every time you spend, there is a little game, there is a little luck, and it’s simple to use,” said Calvin Ng, the alternate chief executive and co-head of retail banking at ZA Bank. “That’s creating engagement and stickiness and a viral effect for our product, and I think this is important for a new bank.” ZA Bank’s app itself is also designed in a style inspired by the world of gaming. Features include interactive virtual characters and seasonal additions like digital lai-sees. “We are generally younger bankers here, that all love games, and we took a lot of references from the gaming industry, for example how they introduce users to new game features, and how they engage their users to keep coming back,” said Ng. He said ZA Bank takes a balanced approach to gamification and was cautious to “not overdo it” while designing new app functions such as budgeting and personal finance features which will be launched as part of a new interface this year. Citibank to stay above the fray in Hong Kong’s rush for virtual banks Competitor Mox Bank already offers an array of online financial tools to help track savings goals and spending habits. According to Benjamin Quinlan, the CEO of Quinlan & Associates, a strategy consulting firm specialising in financial services, broadening the scope of virtual banking apps is important to keep increasing app interaction. “Institutions who can win the battle for screen time can better understand their customers’ digital footprints and use that to push the right products and services at the right time, and can leverage this data to better analyse customers,” said Quinlan. ZA Bank wants to maintain the kind of growth that saw its user base more than double in 2021 from the previous year, passing half a million users, according to Ng. Since its founding, its users have mostly been millennials and their successors, members of Generation Z, but the age gap is closing. Forty per cent of customers are now older than 40, up from 30 per cent last year. But according to Ng, ZA Bank is not explicitly targeting younger clients and believes virtual banking will catch on with all demographics. The bank’s oldest user to date is aged 93. Hong Kong’s virtual banks have more than a million customers between them, and according to a Quinlan & Associates report, this will almost double to 1.9 million by 2025.