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Trading platforms are manipulating investors into gambling on risky products such as derivatives and cryptocurrency using prize draws and frequent push notifications, a new report from the Financial Conduct Authority (FCA) has warned.
This can lead to “adverse financial outcomes” and what the regulator called “potentially problematic engagement” behaviours, such as excessive trading frequency, while also pulling people into riskier investments than they are comfortable with.
The FCA surveyed the frequency with which investment platforms used digital engagement practices (DEPs) to influence consumer behaviour and how this impacted investment outcomes. DEPs are design features used to engage DIY investors, and include game-like elements on trading apps, such as trader leader boards, prize draws or celebratory messages when a trade is made.
