Implementing the FCA's Consumer Duty

The FCA's Consumer Duty is a landmark regulatory initiative that raises the bar for consumer protection across UK financial services. Announced in 2022 and fully in force by 2024, the Consumer Duty requires firms to put customers' needs first and deliver "good outcomes" for retail clients at every stage. Rather than being a one-off compliance project, the Duty represents a mindset shift: firms must build compliance into the entire customer journey, from product design and marketing to post-sale support.

For leaders at fintech firms – including Heads of Compliance, product managers, and founders – implementing the Consumer Duty can feel daunting. However, by breaking it down into its core components and integrating those into everyday processes, you can not only satisfy regulators but also improve your customer relationships. This article outlines the key elements of the FCA's Consumer Duty and practical tips for embedding these principles into your product and service lifecycle.

What is the Consumer Duty? (A Quick Recap)

In July 2022, the FCA published Policy Statement PS22/9 and accompanying final guidance FG22/5, which together set out the new Consumer Duty rules. In essence, the Consumer Duty introduces:

A New Consumer Principle (Principle 12)

"A firm must act to deliver good outcomes for retail customers." This shifts the focus from not just treating customers fairly, but actively ensuring customers get results that are in their best interests.

Cross-Cutting Rules

These are overarching obligations that apply across all areas. They require firms to (1) act in good faith toward customers, (2) avoid causing foreseeable harm, and (3) enable and support customers to pursue their financial objectives. These principles guide how firms should approach all decisions, interactions, and communications under the Duty.

The Four Outcomes

The FCA identified four key outcomes that firms must achieve for their customers:

Products & Services

Products and services should be designed to meet the needs of customers in the intended target market.

Price & Value

The price of products and services should represent fair value for customers (no excessive fees for the benefits provided).

Consumer Understanding

Communications should support customers in understanding products, services, and their implications.

Consumer Support

Customers should receive support that meets their needs throughout their relationship with the firm.

The rules came into force in a phased manner: for all new or open products, the Duty has applied since 31 July 2023, and for closed-book products, since 31 July 2024. Now, in 2026, all in-scope products and services are subject to the Consumer Duty.

Outcome 1: Products and Services – Designing with Purpose

Design and target your products to truly meet customer needs. Under Consumer Duty Outcome 1, firms need to ensure they are offering the right products, to the right customers, for the right reasons.

Define a Target Market

For each product or service, clearly identify the intended customer group and their characteristics. Document what consumer need the product fulfills and any risk of harm if it's mis-sold outside that group.

Design for Suitability

Use target market insights to shape product features. If you run an investment platform catering to novice investors, you might avoid highly complex products or build in guardrails like risk warnings or low default investment amounts. The distinction between appropriateness and suitability assessments is particularly relevant here when determining how to gate access to complex products.

Pre-Launch Testing

Before rolling out new offerings, test them with real consumers or review against a range of customer scenarios (including vulnerable customers). Ask: could this product inadvertently cause harm or confusion?

Ongoing Review

Regularly review products to ensure they remain fit for purpose. If you find a product isn't delivering good outcomes (maybe customers aren't using a feature, or there's an uptick in complaints), you may need to tweak the design, provide additional support, or even withdraw the product.

Example: Suppose a crowdfunding platform offers an innovative investment product aimed at millennials. Under the Duty, the platform should verify that the product's risk level and terms align with the financial capability and needs of typical millennial investors. If the product ends up attracting a lot of retirees for whom it's too risky, that's a red flag – it suggests the targeting or design may need adjustment to avoid foreseeable harm.

Outcome 2: Price and Value – Ensuring Fair Value

The second outcome requires that customers receive fair value in the products and services they buy. "Fair value" means there is a reasonable relationship between the price paid (fees, charges, interest, etc.) and the benefits a customer receives.

Conduct Value Assessments

For each product, periodically assess whether the pricing is justified. Are the fees proportionate to the service provided and the outcomes customers achieve? The FCA expects firms to proactively identify products that may not offer value and take action.

Avoid Hidden Charges

Ensure all costs are transparent and easy for customers to understand. Surprise fees or charges buried in fine print are out of step with the Consumer Duty's ethos. If customers regularly express confusion about pricing, it's time to simplify.

Consider Customer Segments

Different groups of customers may experience your product differently. Perhaps some customers pay fees but never use a feature – that could indicate poor value for that segment. Review outcomes across different customer types.

Benchmarking & Review

Compare your fees or charges to market rates where applicable. While the Consumer Duty doesn't cap prices, if your product is significantly more expensive than competitors for similar outcomes, you should be able to justify the premium.

Example: Imagine a fintech offers an "investment insights" subscription that provides market reports. If analysis shows most subscribers never access the reports, are the fees really fair value? The Consumer Duty would push the firm to either improve engagement (making the product more valuable) or reconsider the pricing.

Outcome 3: Consumer Understanding – Clear and Balanced Communication

The third outcome is about ensuring customers can understand the products and services they're offered. Communications should be clear, timely, and in plain language.

Review Marketing and Disclosures

All financial promotions (ads, website content, social media posts, emails) must be fair, clear, and not misleading. Avoid overly technical jargon. Ensure that risk warnings are prominent and not buried, and that any claims about benefits are balanced with the risks. Firms dealing with high-risk investments should review the FCA's high-risk promotion rules for specific requirements around risk warnings and cooling-off periods.

Consider Your Audience

Tailor communication to your customer base. If you serve first-time investors, avoid complex financial terminology. For products aimed at seasoned investors, more technical detail might be appropriate – but never assume understanding.

Test Customer Comprehension

Use consumer research or A/B testing to gauge if customers truly understand what they're signing up for. If data shows people are surprised by an outcome (e.g., they didn't realise they'd be charged a fee), your communication likely needs improvement.

Key Information at Key Moments

Deliver the right information at the right time. Customers should get important details (like terms, risks, and costs) before they decide, and easy access to information throughout. Avoid information overload – instead focus on what's most material.

Example: A robo-advisor should clearly explain how its algorithm works in simple terms, what customers can expect, and the risks involved (markets can go up and down). If customers later claim "I didn't know I could lose money", that's a red flag suggesting communication wasn't effective.

Outcome 4: Consumer Support – Helpful, Accessible Service

The fourth outcome focuses on the support customers receive. Firms must make it easy for customers to get help, to switch products or leave, and to make complaints.

Accessible Support Channels

Ensure customers can reach you when they need help. Whether via chat, phone, or email, response times should be reasonable. The FCA is particularly concerned about "sludge practices" – making it hard to do things like close an account or cancel a subscription.

Support for Vulnerable Customers

Identify and support customers in vulnerable circumstances (such as those with health issues, financial difficulties, or limited digital skills). This could mean offering alternative communication methods or extra assistance during tough times.

No Unreasonable Barriers

Customers should be able to switch or exit products without unreasonable difficulty. For instance, if opening an account is easy but closing it requires jumping through hoops, that imbalance is a Consumer Duty issue.

Complaints Handling

Have a robust complaints process in place. Treat complaints as learning opportunities – high complaint volumes or common issues should trigger a review of the underlying product or communication. The goal is to fix systemic problems, not just settle individual complaints.

Example: A peer-to-peer lending platform should make the withdrawal or account closure process as easy as signing up. If cancellation requires phoning a number that's only open limited hours or waiting weeks for a response, that friction could breach Consumer Duty expectations.

Embedding Consumer Duty Compliance into Your Journey

Achieving compliance with the Consumer Duty isn't a one-off project – it requires building the principles into your business processes. Here are practical steps for different stages of the customer lifecycle:

Product Design Stage

Include compliance/quality checks in your product development framework. Each new feature or product should have a formal Consumer Duty assessment, asking: Who is this for? What could go wrong? Does it offer fair value?

Marketing and Sales

Establish a sign-off process for all promotional content. Ensure no exaggerated claims or missing risk warnings. Train sales and marketing teams on Consumer Duty principles.

Onboarding and Usage

Monitor how customers use the product. Are they engaging with it as expected? Are there signs of confusion (like repeated support queries about the same issue)? Address issues promptly.

Ongoing Governance

Conduct periodic reviews of each product/service against the four outcomes. This could be annual or whenever there's a significant change. Identify and remediate shortcomings, and report to the board or senior management on Consumer Duty compliance.

Board-Level Accountability

The FCA expects senior leadership to be accountable for Consumer Duty outcomes. Make Consumer Duty a standing agenda item in board meetings. Senior managers should champion the culture of delivering good outcomes.

How RegTech Can Assist with Consumer Duty Compliance

Regulatory technology (RegTech) tools can help firms streamline and evidence their Consumer Duty compliance. While compliance ultimately rests with the firm, technology can support the process in several ways:

Outcomes Monitoring

Dashboards that track key performance indicators across the four outcomes (e.g., customer satisfaction, complaint volumes, usage patterns, churn rates) can provide early warnings of issues.

Content Review

Tools that scan marketing content for problematic language or missing disclaimers can save time and reduce human error. Automated checks flag issues before content goes live.

Workflow Management

Platforms that centralise sign-off workflows ensure nothing falls through the cracks. Every piece of content or product change can be tracked, approved, and audited.

Document Management

Maintain a library of current disclosures, fair value assessments, and target market documentation. Version control and audit trails ensure you can evidence compliance to the regulator.

Of course, no tool can guarantee compliance – human oversight and a genuine commitment to good outcomes remain essential. But technology can make the process more efficient, consistent, and evidence-based.

Conclusion

Implementing the FCA's Consumer Duty is indeed a significant undertaking, but it ultimately boils down to a simple ethos: do the right thing for your customers, at every step. For UK fintech firms in 2026, this ethos needs to be woven into the fabric of product development and service delivery. By proactively designing for good outcomes – ensuring your products are suitable, pricing is fair, communications are clear, and support is helpful – you not only comply with regulation but also build trust and loyalty among your customer base.

The FCA has signalled that it will be monitoring how firms deliver and evidence these outcomes over time. Companies that fall short may face regulatory intervention, ranging from tough conversations with supervisors to enforcement action in serious cases. On the other hand, firms that champion the principles of the Consumer Duty could stand out in a crowded market as customer-centric innovators.

In summary: make Consumer Duty principles business-as-usual. Empower your teams to question decisions from a customer standpoint. Use the cross-cutting rules as a moral compass in grey areas. And remember that compliance is a journey, not a destination – especially when it comes to something as broad and outcomes-focused as the Consumer Duty.