The FCA has warned stock trading app operators to review their design features, including those with game-like elements, which risk prompting consumers to take actions against their own interest.

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 regulator has found that consumers using apps with these kind of features were more likely to invest in products beyond their risk appetite.

Alongside its warning to app-operators, the FCA has published research that raises concerns that customers using such trading apps are exposed to high-risk investments, and that some appear to exhibit behaviours similar to problem-gambling.

While gamification can be used to engage consumers positively, the FCA warned that it is being used in ways that may mislead consumers or lead to poor outcomes and problem behaviours.

“Some product design features could be contributing to problematic, even gambling-like, investor behaviour,” commented executive director of markets at the FCA, Sarah Pritchard.

“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.”

To ensure customers are being treated fairly and ahead of the new Consumer Duty coming into force next year, the FCA has called on all firms to review their products now to ensure they are fit for purpose. The Consumer Duty stipulates that firms must design services so that consumers can make “effective, timely and properly informed decisions” about financial products and services.

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