Digital confetti on Robinhood’s app is nearing its last drop. The trading app is introducing new designs next week to help users celebrate investing milestones, and displayed three of them Wednesday in a blog post.
The confetti animation, which debuted in 2016 and has been featured in the company’s television ads, came under fire in December when Massachusetts securities regulators sued Robinhood, claiming the confetti, emoji-adorned messages and repeated in-app prompts were meant to encourage users toward more frequent engagement — often with riskier investment products.
Rather than portraying its business model as "serious investing with substantial risk," Robinhood is "presented as some sort of game that you might be able to win," William Galvin, the state’s secretary of the commonwealth, said at the time.
Gary Gensler, President Joe Biden’s nominee to lead the Securities and Exchange Commission (SEC) called out the confetti animation — without naming Robinhood specifically — this month at a hearing in front of the Senate Banking Committee.
"What does it mean when balloons and confetti are dropping and you have behavioral prompts to get investors to do more transactions on what appears to be a free trading app, but there’s also this payment behind the scenes?" Gensler told lawmakers.
Madhu Muthukumar, senior director of product management at Robinhood told The Wall Street Journal the confetti "seems to have distracted from the goal of the app, which is to make regular people, everyday folks who have been kept out of the market, feel like they can participate and feel like they are being positively reinforced for taking steps in their financial life."
"If the focus of a conversation is around confetti and not around these people taking these first steps … then we’ve done something that’s just off base," Muthukumar said. "The confetti is getting really misconstrued, and I think it’s actually doing the opposite of what we want."
Robinhood’s new animations aim to give investors more information and "[lay] the groundwork for what customers are to expect," Rich Bessel, Robinhood’s head of design, told the Journal.
"Confetti, while it’s acknowledging something, can ... take away from the text and what’s literally on the screen," Bessel said. "We feel customers, based on feedback, will spend slightly more time on the screen as a result of this and understand exactly what action they took and what resulted."