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This week we conclude our short series on the gamification of investing with a look at a few behavioural techniques with gamification connections that are commonly used by investment platforms.
Attention grabbing design
Investment platforms will often use fancy and appealing design features and visual cues to draw in and keep investors attention. A real-world example is an investment platform that had celebratory confetti bombs going off after an investor made a stock or fund purchase. This type of visual can appear fun and harmless but can unconsciously influence an investor’s behaviour.
Social Interaction
Investment platforms introduce social interaction into their platforms to prompt more user interaction and engagement. Social interaction could include things like forums, message boards, or user chat features that allow users to engage with each other. The more a user engages with the platform the more likely they are to execute more trades and transactions. This type of user interaction can also lead to investors receiving bad advice or even becoming targets of fraudsters.
Social Norms
Many people like to think they don’t follow the crowd, but humans, whether they are aware or not, typically do follow the crowd. Investment platforms know this and post information on their platform that can influence investors to invest more often to “follow the crowd.” This is achieved by posting lists of the most popular stocks, or most bought to sold stocks for the day or another specific period of time.
The advancement and increased availability of online and mobile investment platforms has allowed more people to access the markets and investing than ever before. That increased access has allowed people to take greater control of their investing than ever before. However, investors that are new to DIY investing need to be aware that gamification techniques could be in play on their chosen platform. If you use an online investing platform look for some of the gamification techniques we have mentioned in this series and determine if they have previously, or continue to influence, your investing behavior.
For more information on gamification in investing the Ontario Securities Commission’s Gamification Report provides some in-depth information and analysis.