The Financial Conduct Authority has published findings from a review of consumer credit lenders’ online and in-app loan application processes, concluding that while many digital journeys help prospective borrowers understand what they are signing up to, some designs could prevent consumers from making informed decisions. The FCA has shared examples of good and poor practice with lenders as part of its strategic focus on helping consumers navigate their financial lives. The review identified practices that supported customer understanding, including shorter, simplified language and explainer videos. It also found that some digital loan processes lacked “positive friction” elements intended to prompt consumers to pause and reflect, and excluded information consumers need, including on costs; the FCA noted that positive frictions can include check boxes, time delays and evidence declarations, based on its research in other contexts. While the findings relate to consumer credit providers, the FCA indicated the examples may be relevant more broadly to firms with a digital presence.
Financial Conduct Authority 2025-12-05
Financial Conduct Authority review of digital loan journeys highlights missing positive friction and cost information
The Financial Conduct Authority (FCA) published findings from a review of consumer credit lenders' digital loan application processes, highlighting both effective and problematic practices. While some designs aid consumer understanding, others lack "positive friction" elements, potentially hindering informed decision-making. The FCA shared examples of good and poor practices, noting broader relevance for firms with a digital presence.