Trophies, confetti and other digital rewards borrowed from video games by some investment platforms influence behavior.More than $7.5 million (about €6 million) in fines for launching virtual "confetti" at investors: That is the penalty the American brokerage platform Robinhood paid in January 2024 in the United States. This put an end to legal action by the Massachusetts financial markets regulator, which accused Robinhood of making trading seem like a game with these digital rewards. The regulator found that this encouraged young and inexperienced customers to take on risky transactions. Researchers refer to these features as digital engagement practices (DEP): animations that cover your screen with each completed transaction, or virtual trophies awarded for making a profit. In the United Kingdom, a study by the financial services regulator found that such rewards, inspired by video games, led investors to increase their purchase volumes by over 10%. A similar finding emerged from a study conducted in France by Marie-Hélène Broihanne, professor of finance at the University of Strasbourg. If investors received a bronze, silver or gold cup each time they took more risks, they would continue to increase their risk-taking. The opposite also held true. "If those who save prudently are rewarded, they will continue to do so," Broihanne said, regretting that platforms use gaming "only to encourage further investment." Since the pandemic This study was commissioned by France's Financial Markets Authority (AMF) in 2023. The French stock market regulator found that, since 2019, a growing number of people in France had turned to financial markets, especially since the Covid-19 pandemic. "More than 1.5 million new investors appeared, with a large share under the age of 35," said France Mayer, director of investor relations and protection at the AMF. To better support them, the Authority sought to understand their behavior. At its request, Broihanne examined "copy trading," a practice that involves "copying another investor who has achieved very good results," said Emmanuel Sackmann, France director of the online broker eToro. The site, created in 2007, allows subscribers to invest in all types of assets, such as stocks and cryptocurrencies, or to copy the strategy of its 4,000 "top-investors" – star traders featured on the site's homepage, much like a leaderboard of top players. You have 52.91% of this article left to read. The rest is for subscribers only. --- Original source: https://www.lemonde.fr/en/economy/article/2026/02/16/online-savings-when-gamification-of-investing-becomes-a-risk_6750518_19.html
Trending