We investigated the effect that harmful digital design practices, such as sludge and deceptive design, can have on how consumers make financial decisions.
Read the Research Note (PDF)[1]
Read the technical annex (PDF)[2]
We've been carrying out work to consider the potentially harmful impact digital design can have on consumer outcomes. This is increasingly relevant as the Consumer Duty places a responsibility on firms to give customers the information they need to make informed, effective and timely decisions.
Our work focuses on 2 areas of concern:
- Sludge: unjustified frictions or actions that make an option less attractive to consumers.
- Deceptive design: design elements that may lead consumers to take actions which may be against their best interests.
In this Research Note, we report empirical evidence from an experimental study we ran in January 2022. The study was designed to investigate the impact of sludge and deceptive design on financial decision making.
In the online experiment, we investigated how different presentations of information in a consumer credit journey affected participants' understanding of product features and the actions they then decided to take.
The key finding from the experiment was that digital design matters. Different designs can help or hinder comprehension and they can also affect choices.
Authors
Cameron Belton, Daniel Bogiatzis-Gibbons, Miles Guilford, Isaac Keeley, Gráinne Murphy, Cherryl Ng, Max Spohn, Samuel Wrench
Disclaimer
Research notes contribute to the work of the FCA by providing rigorous research results and stimulating debate. While they may not necessarily represent the position of the FCA, they are one source of evidence that the FCA may use while discharging its functions and to inform its views. The FCA endeavours to ensure that research outputs are correct, through checks including independent referee reports, but the nature of such research and choice of research methods is a matter for the authors using their expert judgement. To the extent that research notes contain any errors or omissions, they should be attributed to the individual authors, rather than to the FCA.