FCA is concerned that certain stock trading apps include game-like elements which risk prompting consumers to take actions beyond their risk appetite and not in their interests. It has highlighted practices which include giving in-app points, badges and celebrations for making trades, and sending frequent market news notifications. FCA has carried out research which suggests that not only are these customers exposed to high-risk investments but also that some of them behave in a similar way to problem-gamblers.
FCA’s research note describes gamification as a seemingly “innocuous cousin of sludge” but one that can drive poor consumer outcomes.
For the moment, FCA has warned firms about its concerns and asked them to review and improve their products as appropriate, and also ensure they are providing support to customers, particularly those who may be vulnerable or showing signs of problem gambling. It is also going to carry out further research, off the back of its 2022 Financial Lives survey which showed that 9% of adults who hold investments have borrowed in order to invest and that nearly half of those could not have invested without borrowing.