A senior Cyprus Securities and Exchange Commission (CySEC) official has called for the European Union's Savings and Investment Union to explicitly prohibit the gamification of investing, warning that smartphone platforms and aggressive marketing campaigns are already steering young, inexperienced investors into speculative products they may not fully understand.
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Panikkos Vakkou, Vice Chairman of CySEC, made the argument in a piece published in the Eurofi Magazine, the policy journal of the European financial services think tank that convened its High Level Seminar in Nicosia this month. Writing for an audience of regulators and industry executives, Vakkou drew a direct line between the spread of mobile investing apps and the growing behavioural risks facing retail savers across the EU.
The warning builds on a position CySEC has held for several years. In 2022, the regulator launched a dedicated investor protection campaign specifically targeting gamification and the influence of so-called finfluencers, raising concerns about younger investors being drawn into complex and risky products through social media promotion.
"The SIU should explicitly reject any gamification of long-term investing and demand transparency from companies about how they make money and where their incentives might work against the customer," Vakkou wrote in the Eurofi piece.
Young Investors in the Crosshairs
The CySEC Vice Chairman said that while smartphones and mobile apps have genuinely widened access to financial markets, the same tools carry a darker side.
"While smartphones and mobile apps have widened access to markets, they have also made risk-taking easier, sometimes pushing investors towards speculative products with little protection," he wrote, adding that investors, "often young and inexperienced," are increasingly influenced by online messaging platforms and aggressive marketing campaigns, framing them as a threat to the very investor base the SIU is designed to serve.
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His piece calls for clear rules on ownership and custody of investment assets, high standards for digital operational resilience, and technology that works smoothly with existing banking and payment infrastructure. On financial literacy, his position was direct: "strong consumer protection and prioritising financial literacy are non-negotiable."
CySEC is far from alone in drawing attention to these risks. The FCA issued a formal warning to trading app operators in late 2022, citing research that linked extensive gamification to gambling-like behavior and potential addiction among retail users. A June 2024 FCA study went further, finding a direct link between game-like app elements and measurably riskier investing behavior among retail participants.
ESMA has also spent years pushing for curbs on these practices, with its chair Verena Ross warning that gamification techniques "may cause retail investors to engage in trading behavior without understanding the risks involved", raising questions about whether the EU's existing investor protection framework is adequate for the app-first generation of market participants. The concern runs deep enough that analysts have been tracking whether a full "degamification" of retail trading is even possible without eroding the retail participation that regulators simultaneously want to grow.
Europe's €10 Trillion Opportunity
Vakkou anchored his technology argument in a number the European Commission has made central to the SIU debate: European households currently hold more than €10 trillion in low-yield bank deposits and rarely access capital markets directly.
He argued that digital platforms, tokenization, and distributed ledger technology could collectively remove the friction that has historically blocked retail participation across borders, by making long-term products easier to compare, cheaper to onboard, and more accessible without sacrificing regulatory standards.
On distributed ledger technology specifically, Vakkou said faster settlement and streamlined post-trade processes could lower operational costs and reduce reconciliation errors, addressing the infrastructure layers where integration has most consistently stalled.
He also pointed to RegTech as a tool for supervisors, saying CySEC's own systems allow the authority to process large data volumes, spot irregularities early, and take action before problems escalate.
"Technology can accelerate the SIU, but only if we're prepared for the risks," he wrote, in a formulation that captures both sides of a debate the regulator is pushing to define.
CySEC highlighted the European Commission's targeted consultation on SIU capital market integration last April, inviting financial institutions to provide feedback on obstacles to cross-border investing, DLT pilot regimes, and asset tokenisation. Vakkou's Eurofi piece is the latest signal from Nicosia that the regulator intends to stay at the centre of that conversation.
Cyprus Pitches Innovation With Guard Rails
Vakkou pointed to CySEC's Regulatory Sandbox as evidence that the jurisdiction is prepared to engage with new models rather than simply police them. The sandbox, launched in June 2024 and opened to FinTech and RegTech applications the following month, gives fintech startups and crypto service providers a supervised environment to test products before they reach the full market. Vakkou said it also gives the regulator early visibility into emerging risks, and deepens dialogue between supervisors and innovators.
The point matters for the broader SIU agenda: CySEC oversees a significant share of EU-passported CFD and forex brokers through Cyprus's MiFID II framework, meaning its regulatory posture has direct implications for a large portion of the retail investment platforms operating across Europe.
