Gamification: Regulators Should Try The Investor Education Game
Gamification: Regulators Should Try The Investor Education Game
Gamification: Regulators Should Try The Investor Education Game
By Michael Gross
June 2, 2021
Summary
Securities regulators' recent interest in gamification exemplifies just that.
According to Merriam-Webster, "Gamification" is "The process of adding games or gamelike elements to something so as to encourage participation." Google's dictionary provides a similar definition: "[T]he application of typical elements of game playing to other areas of activity, typically as an online marketing technique to encourage engagement with a product or service.
So what exactly is the problem with broker-dealers adding game-like features to their trading platforms? One SVP at FINRA was quoted in a recent article as describing the problem to be: "The real danger here is that investors may be making decisions that are contrary to their own financial goals." In other words, it is possible that gamification might cause some investors traders to make poor decisions.
While there apparently is uncertainty regarding the causal connection between gamification and poor trading decisions, there is no uncertainty that inexperienced and unsophisticated investors are more likely than experienced and sophisticated investors to make poor investment decisions.
FINRA now has a working group dedicated to gamification.
Gamification is widely used to make the mundane more enjoyable.
Setting aside the new regime's need to regulate anything and everything, another problem with regulating gamification is assessing where to draw the line.
Their efforts likely will result in guidance and/or rules on gamification.
Because the posterchild for gamification appears to be surrounded by Inky, Blinky, Pinky, and Clyde without a Power Pellet in sight, it would not surprise me if they go the enforcement route.
The truth of the matter is every dollar and ounce of energy spent by regulators on gamification in an effort to protect the ignorant would be much better spent on investor education.
Reference
Gross, M. (2021, June 2). Gamification: Regulators should try the investor education game. Retrieved August 27, 2021, from https://www.jdsupra.com/legalnews/gamification-regulators-should-try-the-3773859/