Consumer Duty: Where Are We Now After Three Years?

• Some thoughts on the progress made since the introduction of the Consumer Duty;

CAPCO

Michael Shand, managing principal at financial services and technology consultancy Capco, reflecting on the three year anniversary since the introduction of Consumer Duty (31^st July 2023): “Consumer Duty has delivered meaningful improvements for consumers by increasing transparency around fees and charges, driving greater scrutiny of fair value and moving vulnerability from a niche compliance consideration to a mainstream business issue. Firms are making greater use of customer data and insights to measure outcomes, and are asking harder questions about whether they are genuinely delivering fair value, rather than simply meeting regulatory requirements. However, there remains significant variation between firms, with many still having further to go.

“The biggest change has been cultural. Consumer outcomes are now much more firmly embedded in decision-making when firms develop products, redesign services or make strategic changes. This shift has been particularly noticeable in board discussions, where customer outcomes have become a standing consideration alongside financial performance and risk. In many organisations, Consumer Duty has helped rebalance priorities after a prolonged period in which the focus, understandably, was dominated by capital, regulation and balance sheet resilience following the financial crisis.

“The firms seeing the greatest benefits are those that have embraced the underlying intent of the regulation. They are using customer data, behavioural insights and research to identify harm and improve outcomes, delivering not only better experiences for customers but also stronger loyalty and more successful innovation. By contrast, some firms continue to treat Consumer Duty primarily as a governance and documentation exercise.

“From here, firms should consider how they use Consumer Duty as a catalyst for continuous improvement. The organisations that go beyond a narrow compliance and consider how it can help them strategically differentiate what they do will be most successful.”

NORTON ROSE FULBRIGHT

Katie Stephen, London Co-Head of the Contentious Financial Services Group at law firm Norton Rose Fulbright:

“The FCA has made it fairly clear that, when it comes to consumer protection, it sees prevention as better than cure. Alongside ongoing Consumer Duty enforcement investigations, we have seen the regulator increasingly use supervisory tools such as skilled person reviews and voluntary requirements to address concerns before significant harm occurs.

“The fact that the FCA’s second Enforcement Watch is solely focused on the Consumer Duty is a warning to firms that they should pay careful attention to the FCA’s expectations in this area, including its recently published good and poor practices, if they want to avoid disruptive interventions. The FCA has signalled that the time for embedding is effectively over. Since January 2026, the number of investigations has increased from six to 11, covering a wide range of sectors and including with regards to fair value. Given the potential impact on the business, firms and senior managers should take particular care when responding to any regulatory enquiry.

“Firms should keep a watching eye on the significant increase in Consumer Duty-related whistleblowing allegations over the past year, which shows the extent to which the Duty has now become part of the regulatory landscape.”