The Financial Conduct Authority (“FCA”) has announced that it is keeping trading apps ‘under review’ in the light of concerns that they have ‘game-like design features’.

As the FCA explains in its statement, following the introduction of the Consumer Duty, trading apps must ensure that their services are designed and tested to that they meet consumers’ needs and “enable them to make effective, timely and properly informed investment decisions, including for those with characteristics of vulnerability”.

Prior to the introduction the Consumer Duty, the FCA had already warned stock trading apps to review design features which might increase the frequency of trading and risk taking, such as push notifications and prize draws. The FCA has now tested the effect of these so-called ‘digital engagement practices’ by building an experimental trading app, and has found that they have a larger impact on certain groups, including those with low financial literacy, women, and participants aged 18-34.

Commenting on these findings, Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said, “trading apps have the potential to transform retail investments, but some in-app features might be pushing consumers towards more frequent or riskier trading, which isn’t right for everyone. With usage and popularity of trading apps growing, we’ll be keeping them under review to make sure customers can make investment decisions that suit their needs. The FCA continues to educate consumers about making better investment decisions and understanding the opportunities and risks, through its InvestSmart campaign. It has also brought charges against ‘finfluencers’ promoting financial products on social media”.