Stock trading apps should review their features to ensure that investors are not tempted into “gambling-like” behaviour, Britain’s Financial Conduct Authority said on Monday.
The watchdog warned stock trading app operators to stop “game-like” elements which risk prompting consumers to take actions against their own interest.
Such features include sending frequent notifications with the latest market news and providing consumers with in-app points, badges and celebratory messages for making trades, the FCA said.
“Some product design features could be contributing to problematic, even gambling-like, investor behaviour,” Sarah Pritchard, FCA executive director of markets, said in a statement.
“We expect all firms that offer stock trading to consumers to review and, where appropriate, make improvements to their products based on these findings.”
The FCA said its research looking at 3,000 users across several app companies raised concerns that customers are exposed to high-risk investments, and that some appear to exhibit behaviours similar to problem-gambling.
More than one million new accounts were opened by 4 trading app firms in the first four months of 2021, almost double the amount opened with all other retail investment services combined.
Companies should make sure they are treating customers in a way that complies with the tougher “consumer duty” protection which comes into force next year, the FCA said.
Source: Reuters
