Embedding the Consumer Duty in light of FCA reviews

Despite its confidence that the Consumer Duty means fewer updates to rules, the FCA is looking to make some changes over the next year. While these changes may be aimed at clarifying and simplifying the Duty over the long term, in the short term it means that firms will need to understand and implement those changes.

Work planned for 2026 shows that the Regulator will aim to tighten how firms interpret the Duty and put it into practice, with the focus likely to be on how products and services are designed, delivered and experienced by consumers. These reviews will look carefully at how existing expectations are being met in practice.

The FCA is also turning its attention to the structure and usability of the Handbook itself. Streamlining is due to take place this year, in line with that broader aim to reduce complexity. For firms, this presents both an opportunity and a challenge: simplification may ease interpretation, but it also removes ambiguities, raising the bar for consistent and demonstrable compliance.

The FCA will continue its work on the Consumer Duty, with a Consultation on the Consumer Duty scope and distribution chain expected in the first half of 2026, and with four cross-cutting projects due over the course of this year:

• Review of products and services outcome – How firms are designing products and services to meet customer needs, including those with characteristics of vulnerability. 

• Review of firms’ approaches to outcomes monitoring – How firms are responding to our outcomes monitoring requirements. 

• Review of firms’ customer journey design – Looking at the design and delivery of firms’ customer journeys to ensure customers’ needs are met, with a particular focus on how firms apply friction throughout the journey.

• Review of the consumer understanding outcome – How firms’ communications are helping consumers make informed decisions. 

Previous reviews show the FCA is moving from ‘show me your framework’ to ‘show me where your framework actually changes customer outcomes’. The single biggest area of focus is management information that genuinely supports outcomes monitoring that triggers action.

For example, a common issue the FCA find is over-reliance on process indicators – like whether an SLA has been adhered to, or how often MI is produced - rather than on actual consumer outcomes. If firms can’t point to real changes, in products, communications or distribution, then they’ll be exposed to scrutiny. All MI should be mapped to the Consumer Duty outcomes. Every KPI should answer: what is happening to the customer as a result?

The FCA wants to see firms treating the Duty not as a tick-box compliance exercise, but as an opportunity both for growth and for better customer outcomes. Firms should aim to proactively engage with the outcomes of the reviews.

Consultation Paper 25/37 set out targeted clarifications of Handbook materials, covering general and technical changes, including updating and removing references to Principles 6 and 7 and treating customers fairly – applicable to all firms – and some updates for investment firms, those holding client assets, insurance firms, and those regulated to offer funeral plans. The FCA is considering feedback and will publish a policy statement with the aim that most rule changes will come into effect immediately after the publication of the policy statement.

As supervisory focus shifts to how the Duty operates in practice, many firms are reassessing whether their current approach will stand up to scrutiny. We work alongside firms to strengthen implementation in the areas that matter most. Contact contact robert.bell@rbcompliance.co.uk.

We also offer a range of support to help firms embed these complex compliance regulations. The Consumer Duty and SMCR are complex and multifaceted regimes; we offer free webinar introductions as well as a variety of templates and guides.