On 27 July 2026, the Financial Conduct Authority (FCA) published the findings of its review into firms’ approaches to monitoring consumer outcomes under the Consumer Duty (the Duty).
Background
The FCA sets out that under the Duty, financial services firms must meet a high standard of retail consumer protection and that a key part of this is monitoring whether their customers are getting good outcomes in practice. The FCA explains that it has reviewed how firms monitor customer outcomes under the Duty but that, overall, it expects firms of all sizes to adopt a proportionate approach, with smaller firms able to use a focused set of indicators provided they can demonstrate how they identify and address customer harm.
Summary
The FCA sets out the following examples of good and poor practice:
- Strategy and framework: Strong firms defined good outcomes in practical terms, often by product and customer journey stage rather than through broad statements. They identified key risks of customer harm, linked these to measurable indicators such as complaints, attrition and compliance monitoring, and focused monitoring where risks were greatest. The strongest frameworks integrated monitoring, governance and remediation. Firms clearly allocated responsibility tracked issues through to resolution and included information from distributors, brokers and outsourced providers. However, some firms lacked a clear customer-outcome focus, relying on high-level frameworks with poorly defined outcomes and limited links to customer journeys. In these cases, it was difficult to identify poor outcomes, understand underlying causes or demonstrate that metrics reflected customer experience.
- Data, management information (MI) and testing: Strong firms used MI proactively to identify foreseeable harm and take timely action. Examples included analysing rejected applications to assess target market alignment, monitoring vulnerable customers using risk indicators, and introducing escalation processes where thresholds were breached. The FCA also observed innovative use of technology and artificial intelligence (AI). Firms used AI to assess customer communications for comprehension risks, support vulnerability identification and supplement human testing. Others improved data quality through transaction testing, categorisation reviews and enhanced customer-recording processes. However, many other firms relied on reactive or lagging indicators and could not clearly demonstrate how MI informed decisions or improved outcomes. Thresholds were often poorly evidenced, and firms sometimes failed to explain why measures were meaningful indicators of harm and a common weakness was insufficient testing of remediation.
- Governance, oversight and culture: Strong governance arrangements included clear accountability, formal escalation routes and evidence that issues were tracked through to resolution. Firms maintained action logs, assigned ownership of remedial actions and used governance forums to monitor progress. However, the FCA found that governance frameworks were often better documented than demonstrated in practice. Firms frequently struggled to show how issues moved through governance structures, how decisions were made and how monitoring translated into improved customer outcomes as board oversight was often limited to reviewing reports rather than challenging them and driving action. Finally, while many firms emphasised Duty culture and training, they often failed to demonstrate how this influenced behaviour, incentives, accountability or decision-making in practice. Smaller firms were particularly reliant on informal cultural mechanisms, with limited evidence that lessons learned were embedded into ongoing processes and staff behaviour.
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