Nithin Kamath, CEO and co‑founder of Zerodha, has publicly criticized “dark patterns” in finance apps. He referred to these design tricks as manipulative features that push users into decisions that may not be in their best interest
What Are Dark Patterns?
Dark patterns are design elements used in apps and websites to influence user behavior—such as flashy “gamification,” casino-like interfaces, push alerts, hidden fees, or opaque offers The Economic Times
Why Finance Apps Use Them
Schools of business suggest many fintech platforms are driven more by profit than users. Kamath said that “incentives are often skewed toward doing what’s good for the business, and not for the customer,” making it hard to act with pure customer interest
Zerodha’s Ethical Stand
Kamath emphasized that Zerodha has avoided dark patterns from day one. He pointed to this as a key factor in gaining user trust: “Doing what’s right for our customers has always been at the heart of our philosophy”
Industry-Wide Concern
Kamath quoted Charlie Munger: “Show me the incentives, and I’ll show you the outcome”. He also shared a video explaining how common dark patterns are in fintech apps
Broader Findings
Supporting Kamath’s view, a 2024 ASCI report revealed that 52 of the 53 most popular apps in India use at least one deceptive design tactic. A separate LocalCircles survey found widespread forced actions like hidden charges, bait-and-switch tactics, and drip pricing across platforms
What This Means for You
- Watch out for casino-style gamification or frequent trading prompts presenting investing as a game
- Beware of notifications meant to create urgency (“Reliance up 5% just now!”) that encourage unnecessary trades
- Always look for transparency in costs, default settings, and consent options before proceeding.
Kamath warns that these features are often built to generate more activity—and revenue—but may disadvantage users
Summary
Nithin Kamath calls out dark patterns in finance apps, highlighting how business incentives can misalign with user welfare. He urges a shift toward transparency and ethical design. Zerodha’s long-standing avoidance of such tactics stands as a model for trust. In an industry full of gamification and hidden prompts, users should remain vigilant and support platforms that prioritize honesty.
