Dark patterns in finance apps
One of the biggest challenges in building a financial services business is that the incentives are often skewed toward doing what’s good for the business and not for the customer. It’s very hard to consistently put customers first.
This is one of the main reasons why finance apps are full of dark patterns, more than almost any other category. Dark patterns are design tricks used in apps and websites to make you do things that are not in your best interest. From pointless “gamification” and casino-like features to manipulative notifications, lack of transparency, and pushing harmful financial products, many platforms are, in some ways, incentivised to work against their own users.
“Show me the incentives, and I’ll show you the outcome.” - Charlie Munger
One reason Zerodha users trust us with their money is because we’ve avoided these practices from day one. Doing what’s right for our customers has always been at the heart of our philosophy.
We recently recorded a video breaking down the most common dark patterns in finance apps.
Read this post for more.
I'm glad you brought this up, Nithin. I’d like to add my perspective based on my experience as a PM in digital finance space.
One of the most powerful dark patterns and also one of the easiest to implement is the pre checked checkbox.
It’s subtle and almost invisible to users, yet it can grant significant authority to an app. Most users don’t even realize what they’re consenting to.
E.g.: Almost all finance apps take permissions like phone state, location, SMS, and contacts are already granted during user onboarding which user agrees to and a strategically placed checkbox later in the journey say, during lead creation or transaction completion can silently extend that access to the app. Especially when it's tied to a required action (“you cannot proceed without agreeing”), hidden under microtext with a long T&C link that no user reads and don't know where the consent use is mentioned in that link. That’s how a perfect trap is set legally defensible, but ethically questionable.
But here’s the important part: RBI clearly mandates that digital lending apps and financial services must obtain clear, explicit, and informed consent from users.
Pre checked boxes or buried permissions don’t qualify. Consent must be a deliberate, conscious action not the result of default settings or user oversight.
This topic is now widely discussed, even Govt is working on dark patterns !!! On a lighter note, you also used this space to market Zerodha…albeit in a +be way…..but effort to daala aapne Zerodha ko promote karane ke liye 😎