The UK’s Financial Conduct Authority (FCA) has urged stock trading apps to review design features, including “game-like” elements to their apps, as it publishes research suggesting apps overexpose consumers to high-risk investments.
The financial watchdog said certain features risked encouraging individuals to “take actions against their own interest”.
Frequent notifications, in-app points, badges and celebratory messages were flagged as problematic examples.
Consumers using apps with these kinds of features were more likely to invest in products beyond their risk appetite, it said.
Its research suggested those using trading apps were being exposed to “high-risk investments” and that many users appeared to demonstrate behaviours similar to those of problem-gambling.
Sarah Pritchard, executive director of markets at the FCA, said: “Some product design features could be contributing to problematic, even gambling-like, investor behaviour. We expect all firms that offer stock trading to consumers to review and, where appropriate, make improvements to their products based on these findings.
“They should also ensure they are providing support to their customers, particularly those in vulnerable circumstances or those showing signs of problem gambling behaviour,” she said.
The regulator’s 2022 Financial Lives Survey found 9% of retail investors had borrowed to invest and that 49% would have been otherwise unable to do so.
As the UK’s new consumer duty comes into force next year, all firms should be “reviewing their products” to ensure they are “fit for purpose”, it said.
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