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The rise of mobile trading applications (“MTAs”) has largely been facilitated by the Financial Conduct Authority's (“FCA”) competition mandate and has democratized access to financial markets. However, the increased competition has led MTAs to deepen gamification techniques, ultimately encouraging impulsive trading behaviour amongst retail investors. This article examines how gamification, coupled with social media influence, poses significant financial risks, including market volatility and systemic risk. It suggests a proactive regulatory approach, emphasizing investor education to mitigate risks. While such efforts can reduce risks, they cannot eliminate them entirely and as such, the FCA faces a crossroads in how they wish to deal with their competing mandates of competition and consumer protection.
James Isaacs (Tue,) studied this question.