Gamification Dubbed a Risk, Warns the FCA

Gamification Dubbed a Risk, Warns the FCA

The FCA has warned market participants of gamification risks on retail trading platforms, which are designed to seem playful, but are as serious as any form of trading and/or gambling.

The official press release states that the FCA has dully warned trading app providers to restructure their gamification elements (those that have them). The regulator stresses that these lead to excessive risky behavior on the part of the users, overtrading, and blinds users to the risks of trading in general.

The UK financial watchdog has published the report, entitled “Gaming Trading”, showcasing to all the disadvantages of gamification. Results showcase that gamification spawns excessive gambling-like behavior in users, which may lead to addiction. The FAC further points to common ‘positive reinforcement‘ strategies used by gamification apps occurring after every successful trade, like celebratory noises or imagery.

Moreover, the use of badges, tiers, and awards, further the issue, with the FCA calling these additions “major sins“. With ranks, achievements, and push notifications, traders are more glued to these apps than ever, whihc increases the risks of losing money or becoming addicted.

Gamification is relatively new phenomenon in the trading world (aside from online gambling), that adds a layer of video game elements to further engage the user in trading.

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