Our findings on the design of digital acquisition journeys and customer outcomes.
We are publishing this work as part of our ongoing commitment to share more information on how firms are embedding the Consumer Duty, so firms can learn from the good practice we have seen and areas for improvement.
In recent years, apps and digital platforms have changed customer journeys. This has affected how customers:
- Engage with firms.
- Apply for products.
- Borrow money.
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.
We worked with a small number of firms, reviewing their digital acquisition journeys and the design of their apps and websites.
Who this applies to
The findings of this review relate to consumer credit providers only, but there is good and poor practice that might be of interest more broadly to those firms with a digital presence.
What we found
The design of digital platforms can encourage customers in a specific direction and can influence their understanding of products and features.
When used well, the design can really support good consumer outcomes.
But customers can also be driven towards making quick decisions which may not be in their best interests or consistent with our expectations under the Consumer Duty.
We encourage firms to consider how the design of customer journeys can affect customer understanding and their decisions when applying for credit.
Design aspects
Some firms had carefully considered the design of their digital platforms and were proactive in reviewing and updating them.
Good practices
Design for different groups
Design digital journeys can be designed to meet the needs of different customer groups identified within the firm’s target market.
Support for all customers
Ensure that adequate levels of support are provided to all customers, including those with characteristics of vulnerability.
Use friction
Consider whether adding friction can help customers with their decisions and how it may affect customer choice.
Clear layout
The layout of product offerings illustrates key features and customers are made aware of the different steps within a journey before the sign-up process.
Clear language
Reduce jargon, using plain English and short sentences to aid understanding.
Visual imagery
Use images and add videos to the digital journey, to help explain key information about products and how they work.
Feedback from frontline agents
Include frontline agents in the design of digital journeys and support, allowing them to provide feedback based on customer interaction.
Test for good outcomes
Testing and quality assurance ensure good customer outcomes. Firms can consider how the speed of digital journeys and timeliness of key information affect outcomes.
Areas for improvement
Not meeting customers' needs
Firms can further consider how they design journeys to meet the needs of their target customers.
Consider the level of support needed by customers and whether they would benefit from additional help and alternative communication channels.
Failure to support vulnerable customers
The design of some digital journeys does not always enable firms to identify and support customers with vulnerable characteristics.
Firms can test how easily customers can disclose vulnerabilities or ask for additional support.
Lack of friction
Positive friction in journeys can drive good outcomes. For example, by helping customers to take time to make fully informed decisions before applying for credit.
Firms can consider if adding friction to their journey could help customers achieve good outcomes.
Bias in layouts
Further consideration can be given to the layout and choice of architecture on some platforms. Design choices can drive customers towards certain decisions and sometimes bad outcomes.
In some cases, pre-selected defaults, incentives and the promotion of certain choices can nudge customers towards a particular decision.
This may inappropriately exploit consumers’ biases to create a demand for a product.
Lack of product information
Key information about products, such as fees and charges, can be presented clearly and in a timely manner to aid customer understanding.
Speed over customers' interests
Credit application journeys are sometimes marketed as being quick or taking a specific amount of time. This may influence customer expectations and could lead to them not acting in their own interests.
Further consideration can be given to how the speed of journeys affects customer outcomes.
Different customer groups
Firms' target markets are likely to include a range of customers with a variety of needs and characteristics. Other circumstances, such as financial literacy, can also impact a customer’s understanding of products and services.
Under the Consumer Duty, we expect firms to understand the needs, characteristics and objectives of customers in the target market, and this should inform the design of the product and customer journeys.
Good practices
Understand your target market
Target market analysis can help firms to better understand the different needs of customer groups. This includes the needs of customers:
- Acquired through different channels.
- Who need additional support.
- With characteristics of vulnerability.
Adequate support for all customers
Firms operating solely through a digital platform make sure they can meet their customers' support needs. This includes customers:
- Dealing with non-standard issues.
- With characteristics of vulnerability.
Customers acquired through different channels, such as third-party referrals, are given more support to understand products and services.
Identify vulnerable customers
Firms can identify customers with characteristics of vulnerability and those requiring additional support through digital channels.
Firms can review the effectiveness of their support channels through testing activity and customer insights.
Testing and quality assurance
Firms can test their communications where appropriate, including in digital journeys, to check that customers understand them and are supported to make effective decisions and act in their own interests.
Good practices
Appropriate language
Firms extensively test the language used in their website, apps and promotions, feeding this into product design and governance.
Easy to understand
Firms assess how easy their communications are to understand.
Data and feedback
Firms use quality assurance and data, as well as feedback from frontline agents to improve support and the digital journey.
Areas for improvement
Failure to test key details
Firms can test key product information for customer understanding. For example, how fees and features are presented to customers.
Complex products: language does not reflect narrow target market
Accessibility software is often used to review the language used in apps and websites.
While this simplifies language, it does not always improve customer understanding, particularly in complex products, as stated in FG22/5: ‘Final non-Handbook Guidance for firms on the Consumer Duty’ (July 2022) (see 4.17).
Poor understanding of product
Firms can test whether end-to-end journeys enable customers to fully understand the product and its features.
This includes how their apps operate on different devices or operating systems.
In some cases, customers cannot fully view pages or access different settings.
Different device settings may affect how customer journeys appear and how well they support customer understanding.
Lack of friction
Even though some digital journeys are designed to be quick, firms can consider the appropriate amount of friction required.
Firms can use testing and assurance activity, so customers have the opportunity to read and understand the information provided.
Outcomes for groups
Firms can also test how different customer groups, and their respective journeys, achieve good outcomes.
Management information and oversight
The Consumer Duty requires firms to monitor and regularly review customer outcomes.
Digital journeys produce significant amounts of data on how customers interact across firms’ apps, websites and financial promotions. This can help firms to understand and monitor outcomes.
During our review and engagement with firms, we saw that analytics software can provide firms with data that gives deep insight into the customer journey. This may include identifying steps on a journey with a high dropout rate, such as the point at which customers are asked to enter payment details.
Areas for improvement
Analyse data on customer journeys
Firms may have access to data that indicates customers are advancing through customer journeys too quickly and not accessing key information, features or help.
Analysis of this data can help firms to improve the design of digital journeys and customer outcomes.
Use multiple indicators to measure success
Firms can be overly reliant on positive online review ratings as an indicator that there are no significant issues and consumers are experiencing good outcomes.
While reviews can be a useful indicator, they are unlikely to be sufficient for firms to understand outcomes across their customer base.
Next steps
We will continue to monitor firms' approaches to digital journeys and app design.
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.