Consumer Duty

What the FCA wants to understand

The FCA’s Consumer Duty sets the standard of care firms should provide to customers in retail financial markets. The regulator wants to understand how your business will place customer interests at the heart of its activities and deliver good outcomes throughout the customer lifecycle.

This section should not be treated as a standalone explanation of the Consumer Duty rules. Instead, the FCA will be looking for evidence that the principles of the Duty have been considered when designing your business model, customer journey, governance arrangements, communications and ongoing servicing approach.

The Duty should be visible throughout your Regulatory Business Plan and reflected in the decisions you make as a business.

When preparing this section, consider:

How have customer needs influenced your business proposition?
How will you ensure customers receive fair value?
How will you communicate information in a way customers can understand?
What support will be available throughout the customer journey?
How will you identify and monitor customer outcomes?
What management information will be reviewed?
How will senior management oversee Consumer Duty responsibilities?
How will customer feedback and complaints influence business improvements?

Answering these questions will help demonstrate how the Duty is embedded within your operating model rather than sitting alongside it as a compliance exercise.

What good looks like

Strong applications typically demonstrate:

A clear understanding of the firm’s target customers and their needs.
How products and services are appropriate for the intended customer base.
How customer communications will be clear, fair and easy to understand.
How customers will be supported throughout their relationship with the business.
How customer outcomes will be monitored and reviewed.
How Consumer Duty is reflected in governance, oversight and decision-making.
How feedback, complaints and management information will be used to identify potential issues and drive improvements.

The strongest submissions do not treat Consumer Duty as a separate policy. Instead, they demonstrate that customer outcomes influence decision-making throughout the business.

Why this matters

Consumer Duty has become one of the FCA’s most significant areas of focus and is expected to influence how firms develop products, communicate with customers and monitor outcomes.

The FCA is not simply assessing whether you understand the rules. It wants confidence that customer outcomes have been considered from the outset and that the business has been designed to deliver fair value, support customer understanding and provide an appropriate level of customer support.

Firms that can clearly demonstrate how Consumer Duty has influenced their proposition and operating model are likely to provide greater confidence to the regulator.

By the end of this section, the FCA should be able to see that Consumer Duty is embedded throughout your business and that customer outcomes have been considered in the design, delivery and oversight of your services.