UK financial watchdog to launch crackdown on video game-style trading apps
The financial watchdog plans to crack down on trading apps that make investing look like a game.
The Financial Conduct Authority (FCA) has said it is “concerned” that some apps giving savers access to the stock market are encouraging them to “take action against their own interest”.
This was often due to the apps frequently sending notifications with the latest market news or giving users points, badges, and celebratory messages on the app to complete transactions.
Crackdown: The Financial Conduct Authority has said it is ‘concerned’ that some investment apps are encouraging savers ‘to take action against their own interest’
According to the FCA, investors using apps with these features “were more likely to invest in products beyond their risk appetite.”
The so-called gamification of trading could, in some cases, be used to better engage app users, the FCA said.
But currently, it is used in a way that misleads customers or leads to problematic behaviors, such as addictions.
FCA’s Sarah Pritchard said: “Certain product design features could contribute to problematic or even gambling-like behavior by investors.”
We expect all companies to review and, where appropriate, make improvements to their products based on these findings.
The use of trading apps has exploded in recent years.
The FCA said 1.15 million accounts were opened by customers of four undisclosed trading apps in the first four months of 2021 alone, nearly double the amount opened with all other investment services. combined detail.