EFFECT OF GAMIFICATION FEATURES IN TRADING APPS ON RETAIL TRADING FREQUENCY

Abstract

The last 10 years have seen a revolution in the Indian stock market with the smartphone providing the platform for trading; its impact has not only altered who trades but how often. Groww and Zerodha now utilise 'game design' elements such as push notifications, trending stock carousels, profit-loss animations and referral rewards in order to incentivise users to continuously come back to its app throughout the trading day. The real question is whether these design decisions are merely user-friendly or whether they may have subtle pressure on users towards increased and more unreflected trading. While popular features for these engagements can extend a user's time on the app, this study focuses specifically on the effect popular features are having on the number of times these young investors actually trade. Primary data gathered from 188 retail investors were analyzed using regression, ANOVA, chi-square and correlation techniques to determine the specific attributes that are significant in influencing how investors trade more frequently. The study additionally explores the impact of demographic elements and investor behaviour patterns on the context of gamification of financial systems. The study adopts primary data that were gathered via a structured questionnaire distributed to existing retail investors who use trading applications. The data is analyzed by using different statistical tools like correlation analysis, ANOVA, chi-square test and regression analysis to find relationships between gamification features and trading frequency. This study uses quantitative research method for assessing the responses and the trend of investors' behavior. The three key factors which reached the statistical thresholds for driving trading frequency were notifications, ease of order entry and realtime alerts, whereas the trends and aesthetics failed to meet the threshold. The findings have practical significance for both the platform designers (who need to strike a balance between attracting users and investor protection) as well as regulators, who, so far, do not have empirical evidence on the matter and on the subject in the Indian context. Finally, this study posits that gamification is not created equal and that some aspects of gamification significantly influence the actions of investors while others are simply superficial.