Robinhood gets rid of confetti feature amid gamification scrutiny

Robinhood is redesigning some of its app features – including dropping its confetti animation – amid scrutiny of the popular stock trading company’s so-called investment gamification.

The free trade pioneer, who is gearing up for his public debut, told CNBC the move was an effort to remove “distraction” from its overall mission to “democratize” investing.

“Previously, we used the same confetti design to celebrate premieres with customers. This included clients’ first interactions, their first steps with cash management, and successful referrals from friends and family. Now we are introducing new dynamic visual experiences. that encourage customers through the stages of their financial journey, ”Robinhood said in a blog post Wednesday.

Robinhood, which is seen as a gateway for young investors to access markets, has lowered the barrier to entry for millions of retail investors. According to SimilarWeb, the platform gained around 6 million users in January and February alone.

However, lawmakers and regulators have accused Robinhood of being reckless to its newbie investors in making decisions that involve real money.

Massachusetts regulators last year filed a lawsuit against Robinhood, citing the company’s “aggressive tactics to attract inexperienced investors, its use of gamification strategies to manipulate customers, and its failure to prevent outages and disruption. frequent on its trading platform ”.

Robinhood told CNBC the confetti was simply about positive reinforcement for a generation of investors who have long been excluded from public markets.

“We’ve also heard the reviews and think it gets distracting when the attention starts to shift to certain misconceptions, and that’s what starts to define what you do,” Madhu Muthukumar, manager, told CNBC. of product management at Robinhood.

“It’s also a good sign to say ‘hey, we should talk about this. We should talk about what we value and not let everyone guess, ”he said.

In an effort to combat some criticism, Robinhood is using new footage.

The confetti is replaced with the following image when a customer makes their first exchange.

Earlier this year, Robinhood found itself in the middle of a firestorm amid GameStop’s short squeeze, which was partly fueled by Reddit-focused retail investors.

At the height of GameStop’s boom, Robinhood and other brokers restricted trading in certain securities due to increased clearinghouse capital requirements.

Robinhood last week filed confidential documents to pursue an initial public offering. CNBC reported earlier this month that Robinhood had chosen the Nasdaq for its IPO, according to people familiar with the matter. Goldman Sachs advised the company on the IPO.