The design of digital platforms can drive customers towards making quick decisions which may not be in their best interests or consistent with the FCA’s expectations under the Consumer Duty, the regulator has warned.

The FCA has published the warning after reviewing digital acquisition journeys.

Financial apps are becoming increasingly popular with many providers and financial advisers offering them.

The regulator said that the way that customers engage with firms, apply for products and borrow money has changed in recent years because of apps and digital platforms.

It said when used well, digital design can support good consumer outcomes. But it said digital platforms and apps can encourage customers in a specific direction and can influence their understanding of products and features.

It said in some cases, pre-selected defaults, incentives and the promotion of certain choices can nudge customers towards a particular decision which may inappropriately exploit consumers’ biases to create a demand for a product.

The FCA said the design of some digital journeys does not always allow firms to identify and support customers with vulnerable characteristics. It said firms should test how easily customers can disclose vulnerabilities or ask for additional support.

Its review also said firms should consider the level of support needed by customers and whether they would benefit from additional help and alternative communication channels.

It also said firms should consider if adding friction to their journey could help customers achieve good outcomes.

Why did the regulator focus on digital acquisition journeys?

The FCA said: “Following our research on digital design and sludge practices, we wanted to see how firms acquire customers through digital channels and how they are delivering good customer outcomes, in line with the expectations of the Consumer Duty.”

The regulator said it worked with a small number of firms, reviewing their digital acquisition journeys and the design of their apps and websites.

It said: “We encourage firms to consider how the design of customer journeys can affect customer understanding and their decisions when applying for credit.”

It said while the findings of the review related mostly to consumer credit providers, “but there is good and poor practice that might be of interest more broadly to those firms with a digital presence.”

The regulator said it will continue to monitor firms' approaches to digital journeys and app design.

It added: “We will also consider how the design of digital products and services offers the required level of support and customer understanding when we engage with firms about the Consumer Duty.”