UK FCA warns against gamification of trading apps

The FCA published research that raises concerns about customers using these trading apps, saying they are exposed to high-risk investments, and behavioural problems similar to those seen in gambling

The UK Financial Conduct Authority (FCA) has told stock trading app operators to review design features, such as gamified elements, that risk prompting consumers to invest beyond their limit. 

Features include sending notifications with the latest market news and providing consumers with in-app points, badges and celebratory messages for making trades. 

The FCA has published research that raises concerns about users of these trading apps, saying they are exposed to high-risk investments and behavioural problems similar to those seen in gambling.    

Sarah Pritchard, executive director of markets at the FCA, said: “We expect all firms that offer stock trading to consumers to review and, where appropriate, make improvements to their products based on these findings.” 

Pritchard added: “They should also ensure they are providing support to their customers, particularly those in vulnerable circumstances or those showing signs of problem gambling behaviour.” 

This advice comes ahead of the new Consumer Duty, arriving next year in the UK, that stipulates firms must design services so that consumers can make effective, timely and properly informed decisions about financial services and products.   

The popularity of trading apps is also rising. In the first four months of 2021, 1.15m accounts were opened across four apps. 

The FCA plans to carry out more research into trading app use and design features, to further understand the issues, such as whether users borrow to invest and the scale of losses. 

The FCA’s 2022 Financial Lives Survey found 9% of all adults with investments have borrowed to invest and 49% of these would not have been able to invest without doing so.  

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Josh Poyser Josh Poyser is an editor at FinTech Intel. He has written about fintech for several years and appeared at FinTech Connect 2023 on the 'Unlocking Success: The Art of Fintech PR' panel.