The Consumer Duty came into force for open products and services in July 2023. For most firms, the first year was dominated by implementation: mapping products against the four outcome areas, updating policies and procedures, establishing board attestation processes, and producing the annual board report.
That phase is now behind us. The FCA's supervisory attention has shifted from "have you implemented the Duty?" to "are you delivering good outcomes?" The questions boards need to be asking have shifted accordingly.
From implementation to outcomes
The Consumer Duty is not a one-time compliance exercise. It is an ongoing obligation to monitor, assess, and improve customer outcomes. The annual board report is a mechanism for that assessment — but it should not be the only one.
Boards that treated the Duty as a project with a completion date are now exposed. The FCA has been clear that it expects firms to be able to demonstrate, on an ongoing basis, that they are identifying and addressing poor outcomes. Firms that cannot show this — regardless of how thorough their initial implementation was — are at risk.
The FCA's attention has moved from "have you implemented the Duty?" to "are you delivering good outcomes?"
Questions boards should be asking now
The following questions are not exhaustive, but they reflect the areas where we see the most significant gaps in board oversight of Consumer Duty compliance.
On outcomes monitoring
- What data is management using to assess whether customers are receiving good outcomes? Is that data genuinely outcome-focused, or does it measure process compliance?
- Are there any customer segments or product lines where outcomes data is weaker or less reliable? What is being done about that?
- How is management identifying customers in vulnerable circumstances, and what evidence is there that those customers are receiving appropriate outcomes?
On the annual board report
- Does the board report reflect genuine self-assessment, or does it primarily document what has been done rather than whether it has worked?
- Has the board challenged management on any aspect of the report? If not, why not?
- What actions were identified in last year's report, and what progress has been made?
On the fair value assessment
- Has the fair value assessment been updated to reflect any changes in product pricing, features, or target market?
- Are there any products where the fair value assessment is marginal? What is the board's view on those products?
- How is the firm monitoring whether the value it assessed at product design stage is actually being delivered to customers in practice?
The FCA's supervisory focus
The FCA has signalled that its Consumer Duty supervisory work in 2025 and 2026 will focus on outcomes monitoring, the treatment of vulnerable customers, and the quality of board oversight. Firms that have robust outcomes data, a genuine culture of customer-centricity, and boards that can demonstrate active engagement with Consumer Duty compliance are well-positioned.
Firms that have a well-documented implementation but limited evidence of ongoing outcomes monitoring are at greater risk. The FCA has made clear that it will not accept "we implemented the Duty" as a sufficient answer to questions about whether customers are receiving good outcomes.
Boards that treated the Duty as a project with a completion date are now exposed.
Practical next steps
For boards that want to strengthen their Consumer Duty oversight, three practical steps are worth prioritising.
First, review the outcomes monitoring framework. Ask management to present the data they are using to assess customer outcomes, and challenge whether that data is genuinely outcome-focused or primarily process-focused.
Second, review the annual board report process. The report should be a genuine assessment of whether the firm is delivering good outcomes, not a documentation exercise. If the board is not challenging the report, it is not fulfilling its oversight function.
Third, consider commissioning an independent assessment of the firm's Consumer Duty compliance. An external perspective can identify gaps that internal teams may have normalised, and provides the board with an independent reference point against which to assess management's reporting.