FCA Consumer Duty Compliance 2026: What Regulated Firms Must Do

Consumer Duty compliance in 2026 is no longer about proving that an implementation project was completed. The FCA now expects firms to demonstrate through products, data, customer journeys, complaints, management information and board challenge that retail customers are actually receiving good outcomes. The Duty is embedded in PRIN 2A and sits alongside sector-specific sourcebooks, financial promotions, complaints, vulnerability and other conduct requirements rather than replacing them.

The FCA has continued to develop its supervisory approach during 2026. It updated its Consumer Duty focus areas in May, published further work on outcomes monitoring and product governance and has emphasised that firms should identify and rectify harm rather than waiting for complaints or enforcement. A firm with comprehensive policies but weak evidence of customer outcomes can therefore remain exposed.

Consumer Duty requirements at a glance

Requirement	What firms need to demonstrate
Consumer Principle	Acting to deliver good outcomes for retail customers
Cross-cutting rules	Good faith, avoiding foreseeable harm and enabling customers to pursue financial objectives
Products and services	Clear target market and products designed to meet customer needs
Price and value	Reasonable relationship between total price and benefits
Consumer understanding	Communications that support informed decisions
Consumer support	Effective support without unreasonable barriers
Outcomes monitoring	Data capable of identifying poor or different outcomes
Distribution chain	Appropriate information sharing between manufacturers and distributors
Vulnerability	Products and support responsive to vulnerable customers where relevant
Board assessment	At least annual governing body assessment of Duty compliance and outcomes
Remediation	Identification and rectification of actual or potential harm
Conduct Rules	Individual customer-outcome responsibility where applicable through COCON

The Duty applies according to detailed scope rules and should not be assumed to cover every customer or every activity of an FCA-regulated firm. Firms should identify the retail business within scope and understand their role in the distribution chain. A proportionate framework starts with that mapping rather than applying every Consumer Duty process indiscriminately across wholesale and out-of-scope business.

The Consumer Principle sets the overarching standard

Principle 12 requires firms within scope to act to deliver good outcomes for retail customers. It applies at a higher level than individual product or disclosure rules and should influence product design, distribution, communications, servicing and remediation. The standard is outcomes-focused, which means firms need judgement as well as compliance with detailed rules.

The Consumer Principle does not mean that every customer must receive a positive financial result. Investment values can fall, borrowers can default and insurance claims can be declined legitimately where policy terms are not met. The regulatory question is whether the firm acted in accordance with the Duty and delivered the standards expected of the product or service.

Firms should therefore define what good and poor outcomes look like for each relevant product. Those definitions can then inform data, monitoring and escalation. Without a clear view of the expected outcome, Consumer Duty reporting can become a collection of metrics with no regulatory conclusion.

The cross-cutting rules shape decision-making

PRIN 2A contains three cross-cutting rules requiring firms to act in good faith, avoid causing foreseeable harm and enable and support retail customers to pursue their financial objectives. These rules apply across the four outcomes and help firms assess situations not addressed by a highly prescriptive rule. They should therefore be integrated into product and customer decision-making rather than treated as introductory wording in the Consumer Duty policy.

Foreseeable harm is particularly important. Firms should use complaints, incidents, product data, vulnerability information and other evidence to identify where harm can reasonably be anticipated and take proportionate action. A firm should not wait for large numbers of customers to experience the same problem where internal data already shows the risk.

Enabling customers to pursue their objectives also affects friction and support. A firm can protect customers from fraud or regulatory risk while still designing a process that allows legitimate customers to access products or resolve issues effectively. Controls should therefore consider both prevention and customer usability.

Products and services need a defined target market

The products and services outcome requires manufacturers to design products that meet the needs, characteristics and objectives of an identified target market. The target market should be specific enough to influence product design and distribution rather than describe almost every potential customer. Firms should also identify groups for whom the product is unlikely to be appropriate where relevant.

Product approval should consider features, risk, customer needs and likely outcomes before launch. Significant changes to pricing, eligibility, technology or distribution should receive equivalent governance because they can alter the product materially. Product review then tests whether the product continues to serve the target market after launch.

Evidence should include actual distribution and outcome data. If a material number of customers outside the intended target market buy the product or a particular segment experiences persistently poor outcomes, the manufacturer should investigate. A product governance committee should therefore challenge evidence rather than simply renew approval periodically.

Distributors also have Consumer Duty responsibilities

A distributor should understand the products it distributes, the target market and how its distribution arrangements affect customer outcomes. The firm may need information from the manufacturer and should provide relevant outcome information back where its position in the chain gives it insight. Consumer Duty is therefore designed to create accountability across distribution rather than place every obligation solely on the product manufacturer.

The exact responsibility depends on the firm's role and influence. An intermediary that materially shapes the customer journey or adds its own fees can affect value, understanding and support even where it does not manufacture the underlying product. The compliance framework should map responsibilities rather than rely on contractual labels.

Commercial agreements should support information sharing. Manufacturers and distributors that refuse to exchange relevant outcome information can struggle to evidence their own compliance. Governance should define what data is needed, how often it is exchanged and what happens when poor outcomes are identified.

Fair value requires analysis of total price and benefits

The price and value outcome asks whether there is a reasonable relationship between the total price paid by the customer and the benefits the customer can reasonably expect to receive. It does not impose general price regulation or require the lowest market price. Firms do, however, need evidence supporting the value assessment and should consider fees, charges, commissions and other elements of total cost.

The methodology should reflect the product. An insurance product can use claims and coverage information, a payment firm can consider transaction charges and FX margins and a lender can consider interest, fees and service. A generic template that asks the same questions for every product can obscure the factors that actually determine value.

Value should be monitored after launch. Changes to costs, customer behaviour, claims, service or distribution remuneration can alter the assessment, and different customer groups may receive different value. Firms should investigate material outliers rather than rely only on an average across the entire product population.

Consumer understanding is more than disclosure compliance

The consumer understanding outcome requires firms to support customers in making informed decisions. Communications should be clear, timely and suited to the characteristics of the intended audience, with important information given appropriate prominence. The test is broader than whether all legally required words appear in a document.

Firms should consider how customers actually engage with communications. Digital journeys, mobile screens, layered information and automated prompts can improve understanding when designed well but can also hide important limitations behind speed or convenience. Testing can include customer research, behavioural data, complaints, contact-centre questions and comprehension exercises where proportionate.

Complex products require greater care. The firm should identify the decisions customers need to make and the information required to support those decisions. Repeating lengthy technical disclosures is unlikely to help if the most important consequences remain difficult to understand.

Financial promotions sit alongside Consumer Duty

Financial promotion rules continue to apply independently of the Consumer Duty. Promotions should be fair, clear and not misleading and satisfy any sector-specific requirements, while the Duty requires firms to consider whether the wider communication journey supports good outcomes. A promotion can therefore satisfy a technical wording requirement and still contribute to poor understanding if the overall presentation is misleading or unbalanced.

Marketing governance should include target audience, product value and foreseeable harm. Affiliates, introducers and social media can create additional risk where messages are distributed outside normal approval channels. Firms should maintain clear responsibility for approving, monitoring and withdrawing material for which they are accountable.

Outcome data should feed back into marketing. If customers consistently misunderstand a product feature promoted heavily in advertising, the firm should consider whether the communication contributed to the problem. Consumer Duty therefore links promotion approval with post-sale evidence.

Consumer support should not create unreasonable barriers

The consumer support outcome requires firms to provide support that meets customer needs throughout the product lifecycle. Customers should be able to obtain help, make changes, complain, switch or exit without facing unreasonable friction. The appropriate support model depends on the product and customer base, but efficiency should not be achieved by making legitimate customer action unnecessarily difficult.

Firms should monitor waiting times, repeat contacts, abandoned calls, complaint themes, digital failure and the handling of complex cases. Aggregate service-level targets can hide poor outcomes for particular groups, so data should identify where customers experience disproportionate difficulty. Outsourced support should be included within the same outcome monitoring.

Automation and AI need governance. Chatbots and self-service can improve access for many customers, but firms should provide effective escalation where automated tools cannot resolve a material issue. The regulated firm remains responsible for the customer outcome even where a vendor supplies the technology.

Vulnerable customers are part of the Duty, not a separate project

Customers can experience vulnerability through health, life events, resilience or capability, and firms should understand the characteristics present in their target market and customer base. The FCA does not require one universal process, but products, communications and support should be capable of responding where vulnerability affects the customer's needs. Staff should know how to identify and escalate relevant indicators.

Outcome monitoring should consider whether vulnerable customers experience materially worse results. Complaints, support access, arrears, claims, cancellations or other sector-specific metrics can reveal differences that are hidden in aggregate data. Where outcomes differ, the firm should investigate whether the cause is legitimate or indicates a barrier that should be removed.

Data protection should be considered at the same time. Vulnerability information can be sensitive, so collection and access should be proportionate to the purpose. The firm should maintain enough information to provide effective support without creating unnecessary privacy risk.

Outcomes monitoring is now the centre of Consumer Duty supervision

The FCA's 2026 outcomes monitoring review reinforces that firms need data capable of showing whether customers receive good outcomes. The objective is not to produce the largest dashboard but to select information that allows management to identify poor or different outcomes and act on them. Metrics should therefore be linked to a clear hypothesis about what good or poor outcomes look like.

Different sectors require different evidence. Payments firms may consider failed transactions, account restrictions and pricing, insurers may use claims and complaints, lenders may use arrears and forbearance and investment firms may consider performance, service and charges. The same four outcomes apply, but the data should reflect the product rather than one generic template.

Thresholds and escalation should also be defined. Management should know when a metric requires investigation and who is responsible for deciding whether action is necessary. A dashboard that repeatedly shows adverse trends without triggering change can become evidence of weak governance rather than good monitoring.

Data quality can undermine the entire Consumer Duty framework

Outcome monitoring depends on reliable data. If the firm cannot identify customer groups consistently, reconcile complaints or connect service and product information, the board may receive a misleading picture even where the dashboard appears sophisticated. Data governance should therefore be treated as part of Consumer Duty compliance.

Firms should understand source systems, ownership, definitions and limitations for material metrics. Manual adjustments and proxy data may be necessary in some businesses, but assumptions should be documented and improved over time. Changes to technology should preserve the ability to compare outcomes across periods where possible.

Quality assurance should also test the conclusions drawn from data. A low complaint rate is not automatically a good outcome if customers cannot access the complaints process or have stopped engaging. Quantitative information should be combined with qualitative evidence where it improves understanding.

The annual board report is a governance assessment, not a template exercise

The governing body must review and approve an assessment of whether the firm is delivering good outcomes for retail customers at least annually. The report should draw together product, value, understanding, support and other evidence and identify actions needed where the firm is not meeting the Duty. The board should challenge the analysis rather than approve a compliance document prepared elsewhere.

The FCA's 2026 work on Consumer Duty board reporting emphasises quality of evidence, challenge and follow-through. Firms should explain material adverse data, differences between customer groups, limitations in monitoring and the status of remediation. Positive statements should be supported by evidence rather than repeated from the previous year.

The report should also influence strategy. If a product repeatedly provides poor value or support arrangements cause persistent harm, the board should consider whether the business model needs to change. Consumer Duty governance is therefore connected to commercial decisions rather than limited to regulatory sign-off.

The Consumer Duty champion has a specific governance role

The FCA expects firms to have a Consumer Duty champion at board or equivalent level who supports the governing body's ability to challenge whether the Duty is embedded effectively. The champion is not the sole person responsible for Consumer Duty and should not become a substitute for collective board accountability. Their role is to help ensure customer outcomes receive appropriate attention in strategic discussions.

The champion should have access to useful outcome information and enough organisational authority to challenge management. The role should be reflected in governance arrangements and not depend entirely on informal conversations. Firms should avoid structuring the champion as an operational owner who then has to provide independent challenge of their own work.

Responsibility for delivery remains across the business. Product, operations, compliance, marketing, technology and customer service can each affect outcomes. The champion helps sustain governance focus but cannot compensate for weak first-line ownership.

SMCR and Conduct Rule 6 reinforce individual accountability

Where the SMCR applies, senior managers should understand how the Duty relates to their responsibilities and take reasonable steps within their areas. Relevant Conduct Rules staff can also be subject to the individual rule requiring them to act to deliver good outcomes for retail customers where the underlying activity falls within the scope of Principle 12. Firms should therefore connect Consumer Duty with role-specific Conduct Rules training.

Individual accountability does not mean every employee is responsible for the entire Duty. Responsibilities should reflect the person's role, authority and decisions. A product executive, complaints manager and compliance officer contribute in different ways and should receive training that explains the practical application to their work.

Breaches should be assessed consistently with the firm's Conduct Rules process. Where poor customer outcomes arise from repeated individual or management failings, the firm should consider whether fitness, propriety or conduct issues also arise. Governance should avoid treating systemic Consumer Duty problems solely as process defects where accountability is relevant.

Complaints should feed directly into Duty monitoring

Complaints provide direct evidence of customer experience and can identify weaknesses across all four outcomes. Firms should analyse themes, root causes, uphold rates, redress and repeat issues and determine whether the complaint indicates a wider population may be affected. Consumer Duty should therefore be integrated with DISP governance.

A low number of complaints should be interpreted carefully. Customers may not recognise harm or may abandon contact before a complaint is recorded, so complaints should be considered alongside operational and behavioural data. Firms should also monitor dissatisfaction captured through informal channels where it provides useful evidence.

Root-cause analysis should lead to action. Where a complaint identifies a product or process weakness affecting other customers, the firm should consider broader remediation rather than limit the response to the complainant. This is increasingly important under the FCA's approach to identifying and rectifying harm.

Firms should identify and rectify harm proactively

The FCA published FG26/2 on identifying and rectifying harm during 2026, reinforcing the expectation that firms should take appropriate action when they identify customer harm. The regulatory framework should therefore include governance for determining the affected population, calculating remediation, communicating with customers and preventing recurrence. Waiting for every affected customer to complain can be inconsistent with the Duty.

The first challenge is identifying scope. Data, root-cause analysis and sampling can help determine whether a control failure is isolated or systemic. The firm should document assumptions and limitations and escalate uncertainty where the potential customer impact is material.

Remediation should be fair and operationally deliverable. The firm should consider interest, fees, consequential loss or other elements according to the circumstances and relevant rules rather than use one generic formula. Controls should also address the underlying cause so that harm does not continue while redress is being paid.

Consumer Duty and operational resilience are connected

Operational disruption can create poor customer outcomes even where the underlying product remains appropriate. Customers can lose access to money, insurance claims, trading or support when critical systems fail, so important business services and Consumer Duty outcomes often overlap. Firms should therefore consider customer harm when setting resilience priorities and testing scenarios.

Incident management should identify whether particular customer groups are affected more severely. Vulnerable customers or customers with time-critical needs may require additional support during disruption. Communications should be clear and timely enough to help customers understand what has happened and what action they should take.

Third-party failures remain the regulated firm's responsibility for Consumer Duty purposes where they affect its customer service. Outsourcing governance should therefore include customer outcomes as well as technical performance. A provider meeting uptime targets can still create harm through poor support or processing quality.

Consumer Duty should be built into change management

New products, pricing changes, technology releases, acquisitions and distribution arrangements can alter customer outcomes materially. Change governance should therefore assess the four outcomes and cross-cutting rules before launch. Compliance involvement should occur early enough to influence design rather than at final approval.

Material product changes should consider target market, value, communications and support together. A lower-cost digital journey may improve value but create poor support for customers who cannot use the technology, while a new fee can change value even if product features remain identical. The assessment should examine the complete customer effect.

Post-implementation review is also useful. Actual customer behaviour may differ from assumptions made during approval, and outcome monitoring should test whether the change produced the expected result. Significant deviations should trigger remediation or redesign.

Distribution chain governance needs usable information

Manufacturers and distributors need to exchange enough information to meet their respective Consumer Duty responsibilities. The manufacturer may need distribution and outcome information to assess whether the product reaches the intended target market, while the distributor needs product, target market and value information to distribute appropriately. Contracts and data processes should support that exchange.

Firms should avoid excessive information requests that produce large volumes of unused data. The objective is to exchange information relevant to the decisions each firm needs to make. Governance should define materiality, frequency and escalation where data indicates poor outcomes.

Chains involving Appointed Representatives, brokers, white-label partners or outsourced service providers can create additional complexity. The regulated firm should understand which participant influences each outcome and maintain oversight proportionate to its responsibilities. Contractual allocation should not obscure regulatory accountability.

Consumer Duty should be proportionate to the business

The FCA has repeatedly emphasised proportionality and is simplifying aspects of regulation where unnecessary duplication exists. Consumer Duty does not require every small firm to build the same data warehouse or governance structure as a major bank. It requires each firm to have sufficient evidence and controls for the nature, scale and complexity of its retail business.

Proportionality should not become an excuse for lack of evidence. A smaller firm can use simpler metrics, sampling and management reporting, but it still needs to understand whether customers receive good outcomes. The framework should be capable of identifying problems and driving action.

Firms should also avoid duplicating existing sector controls unnecessarily. MCOB, ICOBS, payment conduct rules and other sourcebooks can provide much of the operational evidence needed for the Duty where mapped intelligently. The strongest framework integrates rather than adds a separate compliance layer to every process.

A practical Consumer Duty compliance review

A strong review begins by confirming scope, customer groups, products and the firm's role in the distribution chain. It should then assess governance, target markets, value, communications, support, vulnerability and the data used to monitor each outcome. Policies should be compared with live customer journeys and operational evidence.

Testing should focus on whether the firm can identify and explain customer outcomes. Product files, fair value assessments, communications, complaints, call data, service metrics and board MI can be sampled according to risk. Differences between customer groups should be investigated where they may indicate foreseeable harm.

The review should end with a prioritised remediation plan. Issues should be ranked by customer and regulatory significance, with responsible owners, deadlines and evidence required for closure. The annual board assessment should then be able to explain progress rather than repeat unresolved concerns from previous years.

How Buckingham Capital Consulting can help

Buckingham Capital Consulting provides Consumer Duty compliance support to regulated financial-services firms, with particular expertise in payments, e-money and other FCA-regulated businesses. We can conduct complete or targeted reviews covering scope, products and services, fair value, consumer understanding, consumer support, vulnerability, distribution chains, outcome monitoring and the annual board report. Reviews use operational evidence rather than assess policies in isolation.

We can also help firms improve management information, design fair value and product governance processes, test customer communications and establish remediation where poor outcomes have been identified. Where Consumer Duty weaknesses form part of wider FCA supervisory engagement, the project can include regulatory response, governance improvement and evidence of remediation. Existing sector-specific controls are reused where appropriate so the firm does not create unnecessary parallel processes. To discuss a Consumer Duty review, outcomes-monitoring framework, board assessment or remediation programme, contact Buckingham Capital Consulting.

Frequently asked questions

What are the four Consumer Duty outcomes?

The four outcomes cover products and services, price and value, consumer understanding and consumer support. They sit underneath the Consumer Principle and cross-cutting rules and require firms to assess what customers actually experience. The exact evidence should reflect the firm's products and customer base.

What does the FCA expect from Consumer Duty outcome monitoring in 2026?

The FCA expects firms to use data and other evidence capable of identifying good, poor or different outcomes and to act where issues are found. Dashboards should therefore contain decision-useful information rather than large numbers of metrics without clear thresholds or conclusions. The firm's monitoring should be proportionate but sufficiently robust to support board oversight.

Does every FCA firm need a Consumer Duty board report?

Firms within the Duty's scope need their governing body to review and approve an assessment of whether the firm is delivering good outcomes at least annually. The report should use relevant evidence, identify risks and explain actions or remediation. The precise format can be proportionate to the size and complexity of the business.

Does Consumer Duty replace existing FCA sourcebooks?

No. The Duty sits alongside sector rules such as MCOB, ICOBS, COBS and payment-services requirements. Firms should comply with the detailed rules and use the Duty to assess broader customer outcomes and foreseeable harm. Good implementation usually integrates existing controls rather than duplicating them.

Can Buckingham Capital Consulting carry out an independent Consumer Duty review?

Yes. BCC can review the firm's Consumer Duty framework, including product governance, fair value, communications, support, vulnerability, outcomes data and board reporting. The review can identify regulatory gaps, test whether controls operate in practice and produce a prioritised remediation programme. It can also be targeted at one specific outcome or product where the board wants independent assurance.

#FCA Consumer Duty Compliance 2026: What Regulated Firms Must Do