The UK’s financial watchdog has raised concerns over the design of online and mobile loan applications, warning that some platforms are making it too easy for borrowers to gloss over key details—particularly on cost.
In a review published Thursday, the Financial Conduct Authority (FCA) said that while digital lending tools can offer faster and more convenient access to credit, they risk undermining transparency when poorly designed. The regulator pointed to examples where application journeys lacked “positive friction”—features such as well-timed pauses or confirmation steps that prompt users to stop and consider the terms before committing.
“Online and app-based applications can make it easier for people to get the credit they need to navigate their financial lives,” said Alison Walters, director of consumer finance at the FCA. “But poorly designed applications could mean people bypass important information. We’re sharing examples of what works and what doesn’t, so lenders can better support their customers.”
The review is part of the FCA’s wider push under the Consumer Duty rules, which require financial firms to deliver clear, fair, and transparent outcomes for retail customers. Since the new standards came into force, the regulator has turned a sharper focus on how financial products are being presented—especially when it comes to credit.
While the review focused on consumer lending apps, its implications extend more broadly across the fintech sector, where design choices can materially influence user behaviour.
Some firms were praised for using plain language and embedding explainer videos that helped users understand borrowing terms. But others, the FCA noted, buried essential information such as total repayment costs or APRs, or skipped steps that would help borrowers reflect before completing an application.
The FCA has now shared its findings with lenders and is encouraging them to rethink how their digital journeys are structured. That could mean introducing pop-ups to highlight total borrowing costs, requiring users to tick checkboxes acknowledging terms, or redesigning flows that currently let customers click through without reading disclosures.
