Trading apps warned on ‘gamification’
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Trading apps warned about ‘gamification’: City regulator tells providers to review certain features to entice customers to buy investments
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The city’s regulator has warned investment app providers to review the game-like features some use to entice customers to buy investments.
As revealed exclusively in last week’s Wealth & Personal Finance section, the Financial Conduct Authority is increasingly concerned that app users are buying investments they don’t really understand – and getting caught up in the gamification of the products.
Concerns: The FCA is increasingly concerned that app users are buying investments they don’t really understand – and that they’re becoming enthralled by the gamification of the products
These include points, badges and festive messages when they make transactions.
Many younger investors are attracted to such apps in the hope of making quick returns.
Sarah Pritchard, FCA’s executive director of markets, told The Mail on Sunday on Friday: ‘Some positions can contribute to problematic, even gambling-like behaviour. We expect all companies to improve products.’
Regulatory research shows that trading apps “sometimes play a role in driving bad outcomes for consumers” and fueling “problem gambling.”
It says of five apps it surveyed, nearly half of users of two of the apps invested “potentially above their risk appetite.”
Major providers of trading apps are eToro and Revolut. Both told the MoS that they make sure new investors understand the risks of trading.