The FCA’s Latest Consumer Understanding Findings Highlight a Growing Challenge for Firms

Since the introduction of the FCA’s Consumer Duty we've become quite used to regular updates and feedback from the FCA, the last month has been no different.

On 29th April they opened a consultation on reviewing financial promotions rules for consumer credit (CP26/15: Reviewing the financial promotions rules for consumer credit | FCA) only two days previously they released a joint statement with the ICO outlining their expectations when processing vulnerable customer data (Joint FCA and ICO statement on regulatory expectations regarding firms’ approaches to vulnerability related data | FCA).

Then we had the FCA’s recent publication on consumer understanding which provides an important reminder that Consumer Duty is increasingly moving beyond policy implementation and into practical evidence of customer outcomes.

While many firms have spent considerable time reviewing customer communications, governance frameworks, and customer journeys since the introduction of the Duty, the FCA’s latest findings suggest there is still significant work to do in demonstrating that communications are genuinely understood by customers in practice.

The regulator highlighted a number of areas where firms performed well, including testing communications, simplifying language, improving accessibility, and embedding clearer governance around customer understanding.

However, the publication also identified recurring weaknesses, particularly where firms:

• relied on assumptions rather than evidence,

• failed to test customer understanding effectively,

• lacked clear ownership of customer understanding outcomes,

• or treated Consumer Duty requirements as isolated compliance exercises rather than embedded operational responsibilities.

A Wider Challenge for Firms

Although the FCA’s findings focus on customer understanding, the themes will resonate more broadly across firms’ compliance frameworks.

Many organisations are now facing a wider operational challenge:

How do you demonstrate that regulatory expectations are genuinely understood and embedded across the business?

This applies not only to customer communications, but also to:

• Consumer Duty responsibilities,

• Conduct Rules,

• vulnerability awareness,

• financial crime obligations,

• complaints handling,

• and wider conduct expectations.

For compliance teams already managing regulatory change, monitoring activity, board reporting, and oversight responsibilities, ensuring consistent staff understanding across these areas can become increasingly resource intensive.

Why Training Is Becoming More Important

The FCA’s publication places significant emphasis on testing, evidence, governance, and ongoing monitoring.

In practice, this means firms are increasingly expected to demonstrate:

• how regulatory expectations are communicated internally,

• how understanding is assessed,

• and how firms ensure consistency across teams and customer journeys.

This is one reason many firms are reviewing their approach to compliance training and competency management.

Structured e-learning can help firms create a more consistent and measurable approach to regulatory training while reducing operational pressure on internal compliance teams.

Importantly, effective training should not simply explain rules. It should help employees understand how regulation applies within real customer interactions and day-to-day decision making.

Moving Beyond “Tick-Box” Compliance

One of the most notable themes in the FCA’s findings is the importance of embedding consumer understanding into everyday business processes rather than treating it as a standalone compliance requirement.

The same principle applies internally.

Firms that embed practical, accessible, and consistent compliance training across their organisation are often better positioned to:

• reinforce good customer outcomes,

• support positive conduct cultures,

• evidence competency and oversight,

• and reduce regulatory risk.

At RB Compliance Consultancy, our e-learning solutions are designed around these practical challenges.

Covering key areas such as Consumer Duty, Conduct Rules, Financial Crime, Vulnerable Customers, GDPR, and Complaints Handling, the training is developed using practical regulatory experience within financial services.

Content should be developed from practical compliance experience within financial services, speaking to the learner in a language they can understand. This is what we, for example, strive to acheive in our e-learning (Compliance E-Learning | RB Compliance Consultancy).