The Securities and Exchange Commission has announced that it is seeking feedback from the public about the “gamification” of online trading. Particularly, the SEC is interested in how this gamification can change or affect user behavior and their trading choices on the platform as well as platforms’ uses of digital engagement practices (DEPs), essentially predictive analytics.
Though the SEC, for now, is just on an opinion-finding mission, it is clearly concerned that the use of gamification techniques and DEPs could harm or disadvantage retail investors, perhaps causing them to make trades that will be detrimental in the short or long term.
Announcing its call for feedback, SEC Chair Gary Gensler said, “While new technologies can bring us greater access and product choice, they also raise questions as to whether we as investors are appropriately protected when we trade and get financial advice. In many cases, these features may encourage investors to trade more often, invest in different products, or change their investment strategy. Predictive analytics and other DEPs often are designed with an optimization function to increase revenues, data collection, or customer time spent on the platform. This may lead to conflicts between the platform and investors.”
Though the SEC doesn’t mention any platforms by name, it seems pretty clear the insanely popular stock trading app Robinhood falls into the category of services that use gamification and DEPs to drive engagement. And the SEC wants to know how retail investors feel about this. Is it a good thing? A bad thing? To let the SEC know your thoughts, head over to the SEC’s Tell Us About Your Experiences With Online Trading and Investment Platforms page. There you’ll find a questionnaire to fill out. All comments will be collected and published on the SEC’s website.