Consumer Duty: What Regulated Firms Must Do (2026)

Consumer Duty

The Consumer Duty is the Financial Conduct Authority's standard requiring firms to deliver good outcomes for retail customers. Set out in a new Principle for Businesses, Principle 12, and supported by detailed rules in the Handbook at PRIN 2A, it goes further than the previous requirement to treat customers fairly by obliging firms to act to deliver good outcomes across four areas: products and services, price and value, consumer understanding and consumer support. The Duty applies to firms across retail financial services, including payments and e-money firms that serve retail customers, and it is an ongoing obligation, evidenced through an annual board report, rather than a one-off implementation exercise.

This guide explains what the Consumer Duty requires, who it applies to, the four outcomes, the recurring obligations firms must meet, and how to evidence compliance. It is written for regulated firms, their boards and their compliance teams.

What the Consumer Duty is

The Consumer Duty raises the standard of care that firms owe to retail customers. At its centre is the requirement, in Principle 12, that a firm must act to deliver good outcomes for retail customers. This is supported by three cross-cutting rules that shape how firms must act throughout their dealings with customers: to act in good faith, to avoid causing foreseeable harm, and to enable and support customers to pursue their financial objectives. Beneath the cross-cutting rules sit the four outcomes, which apply the Duty to specific aspects of the customer relationship. The Duty came into force for open products and services in July 2023 and for closed products in July 2024, and it now applies on an ongoing basis to firms across the retail distribution chain.

Who the Consumer Duty applies to

The Duty applies to firms involved in the manufacture or distribution of products and services to retail customers, across the retail financial services sector. This includes banks, insurers, investment and consumer credit firms, and payment and e-money firms where they serve retail customers. It applies throughout the distribution chain, so a firm can be subject to the Duty whether it designs a product, distributes it, or both, and firms must consider their role and act accordingly. Where more than one firm is involved in delivering an outcome to a customer, each has responsibilities appropriate to its role, and firms are expected to share information along the chain so that the Duty can be met end to end.

The four outcomes

The four outcomes translate the high-level Duty into practical obligations.

Outcome	What it requires
Products and services	Products and services must be designed to meet the needs of an identified target market and be distributed appropriately
Price and value	Products and services must provide fair value, with a reasonable relationship between the price paid and the benefit received
Consumer understanding	Communications must equip customers to make effective, timely and properly informed decisions
Consumer support	Support must meet customers' needs, so that they can use products as expected and act in their interests without unreasonable barriers

Underpinning all four is a strong focus on vulnerable customers: firms must take particular care to ensure that customers in vulnerable circumstances experience outcomes as good as those of other customers.

The recurring obligations

The Consumer Duty is not satisfied by a one-off implementation project. It requires firms to monitor and evidence the outcomes their customers actually receive, on a continuing basis, and to act where the data shows customers are not receiving good outcomes. Firms must gather and assess outcomes data across the four areas, identify where outcomes fall short and take action to address them, and maintain the product governance, fair value assessments and communications testing that the outcomes require. The obligation is one of outcomes, not merely process: it is not enough to have policies in place if the data shows customers are being harmed or receiving poor value.

The annual board report

A central, recurring requirement of the Consumer Duty is the annual board report. A firm's board, or equivalent governing body, must review and approve, at least annually, an assessment of whether the firm is delivering good outcomes for its customers consistent with the Duty. The report should draw on the firm's outcomes monitoring, identify any areas where customers are not receiving good outcomes, set out the actions taken or planned to address them, and inform the firm's future strategy. The board report is the principal way in which a firm evidences, to itself and to the FCA, that it is meeting the Duty, and preparing it well requires the outcomes monitoring to have been done properly throughout the year. Many firms find the board report the most demanding single element of the Duty, precisely because it depends on having gathered and analysed meaningful outcomes data.

How Buckingham Capital Consulting can help

Buckingham Capital Consulting advises regulated firms, including payments and e-money firms, on implementing and maintaining the Consumer Duty. We help firms map their role in the distribution chain, design and document product governance and fair value assessments, put in place outcomes monitoring across the four areas, and prepare the annual Consumer Duty board report so that it properly evidences the firm's compliance. We also help firms embed the vulnerable-customer considerations that run through the Duty and respond where outcomes monitoring identifies areas that need to improve.

If you need to implement the Consumer Duty, strengthen your outcomes monitoring, or prepare your annual board report, contact our team for an initial assessment.

Email: info@buckinghamcapitalconsulting.co.uk.

Frequently asked questions

What is the Consumer Duty?

The Consumer Duty is the FCA's standard requiring firms to act to deliver good outcomes for retail customers. It is set out in Principle 12 of the Principles for Businesses and supported by detailed rules at PRIN 2A in the Handbook. It goes beyond the earlier requirement to treat customers fairly by imposing a higher, outcomes-focused standard, structured around three cross-cutting rules, to act in good faith, avoid foreseeable harm and enable customers to pursue their financial objectives, and four outcomes covering products and services, price and value, consumer understanding and consumer support. The Duty came into force for open products in July 2023 and for closed products in July 2024, and it applies on an ongoing basis, requiring firms to monitor and evidence the outcomes their customers actually receive.

Does the Consumer Duty apply to payment and e-money firms?

Yes. The Consumer Duty applies across retail financial services, and payment and e-money firms are within its scope where they serve retail customers. Such firms must therefore consider the four outcomes in the design and delivery of their products and services, provide fair value, communicate in a way that supports good customer decisions, and offer support that meets customers' needs. They must also monitor the outcomes their retail customers receive and produce the annual board report. The FCA has been explicit that safeguarding good customer outcomes in the payments sector, where many customers show characteristics of vulnerability, is an important supervisory priority, so payment and e-money firms should treat the Duty as a core, ongoing obligation.

What are the four outcomes under the Consumer Duty?

The four outcomes apply the Duty to specific parts of the customer relationship. The products and services outcome requires products to be designed for an identified target market and distributed appropriately. The price and value outcome requires products to offer fair value, with a reasonable relationship between the price paid and the benefit received. The consumer understanding outcome requires communications that equip customers to make effective, timely and properly informed decisions. The consumer support outcome requires support that meets customers' needs and allows them to use products as expected without unreasonable barriers. Running through all four is a particular focus on customers in vulnerable circumstances, who must experience outcomes as good as those of other customers.

What is the Consumer Duty board report?

The board report is the annual assessment that a firm's board, or equivalent governing body, must review and approve to confirm whether the firm is delivering good outcomes for its customers in line with the Duty. It should be based on the firm's outcomes monitoring across the four areas, identify any areas where customers are not receiving good outcomes, describe the actions taken or planned to address those shortfalls, and feed into the firm's future strategy. The board report is the principal means by which a firm evidences its compliance with the Duty, both internally and to the FCA. Because it depends on having gathered meaningful outcomes data throughout the year, firms that leave the underlying monitoring until the last minute tend to struggle to produce a credible report.

How is the Consumer Duty different from Treating Customers Fairly?

The Consumer Duty sets a higher and more demanding standard than the previous Treating Customers Fairly framework. Treating Customers Fairly was largely about firms having fair processes and outcomes in a general sense, whereas the Consumer Duty requires firms to act to deliver good outcomes and to evidence that they are actually doing so through outcomes monitoring and the annual board report. The Duty is explicitly outcomes-focused: it is not enough for a firm to demonstrate fair processes if the data shows customers are receiving poor value or being harmed. The cross-cutting rules and the four outcomes also give the standard a more detailed structure, and the FCA has signalled that it will supervise and enforce the Duty actively, using outcomes data to identify firms that fall short.