UK Financial Conduct Authority Research on Digital Engagement Practices in Trading Apps

The Financial Conduct Authority has published a research note setting out the outcomes of an experiment to investigate the effect of digital engagement practices (DEPs) on trading behavior. The FCA tested an experimental trading app platform with over 9,000 consumers and found that DEPs, such as push notifications and prize draws, can increase trading frequency and risk taking. These features are able to attract consumer attention while conveying no additional information which could improve trading. The FCA has previously warned stock trading apps to review game-like design features in 2022 ahead of the Consumer Duty's implementation. In its press release, the FCA has confirmed that with the usage and popularity of trading apps growing, it will be keeping them under review to ensure customers can make investment decisions that suit their needs.

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