FCA Concerned Over Gambling Aspects of Trading Apps – VegasSlotsOnline

FCA Concerned Over Gambling Aspects of Trading Apps – VegasSlotsOnline

Home News UK Financial Watchdog Outlines Concerns Over Gambling Aspects of Trading Apps

The UK Financial Conduct Authority (FCA) has laid out its concerns over gambling-like aspects of share trading apps. The FCA issued a warning on Monday to operators of stock trading apps to conduct reviews of their design features, especially when game-like elements exist. There are concerns that certain aspects of these apps increase the risk of users engaging in actions that are not in their own best interest.
operators giving users in-app badges, celebratory messages, and points
The FCA statement outlined certain areas of concern, such as operators giving users in-app badges, celebratory messages, and points when they conduct trades. There are also concerns that notifications about the latest market news can have a negative impact on users.
The FCA has discovered through its research that people using apps with these types of features are likelier to invest in types of products that are above their appetite of risk. There are also concerns that trading apps expose people to particularly high-risk investments, with some users showing indicators that are similar to problem gambling.
FCA executive director of markets Sarah Pritchard explained that “some product design features could be contributing to problematic, even gambling-like, investor behavior.”
She reiterated that all trading app operators should review their systems and make improvements where appropriate. Operators should also ensure that they are providing a level of support to users, especially for people who might be at risk or could be showing certain problem gambling behavior signs.
The FCA has plans to conduct more research on the use and design features of trading apps. It wants to better understand certain financial vulnerabilities associated with people using these types of apps, including whether users are likelier to have bigger losses and try to borrow in order to invest.
9% of adults who hold investments have borrowed money in order to invest
According to the Financial Lives Survey for 2022 by the FCA, 9% of adults who hold investments have borrowed money in order to invest. Of those people, almost half of them would not have had the money to invest without borrowing.
New Consumer Duty rules are taking effect next year in the UK. Under these rules, all operators must have offerings that allow users to make informed decisions in a timely and effective manner when it comes to financial services and products.
By Mark Pearson
– November 21, 2022
By Andrew O’Malley
– November 21, 2022
By Andrew O’Malley
– November 21, 2022
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