When the Consumer Duty first came into force in July 2023, it dominated regulatory discussion across financial services. But the preparation had been going on for many months prior.
This saw firms rush to build implementation plans, governance committees expand and boards spending months working through what ‘good outcomes’ would mean in practice. The FCA’s messaging was intentionally firm because the regulator wanted firms to treat the regime as a serious shift in accountability rather than another checkbox compliance exercise.
Three years on, the conversation around Consumer Duty is beginning to evolve. As firms move into the third annual Consumer Duty board reporting cycle this year, the emphasis has shifted from implementation towards evidencing outcomes, particularly as firms move into a more mature phase of board reporting and oversight. Some of the governance themes that featured heavily during the rollout phase, including the FCA’s earlier expectation that firms appoint a Consumer Duty board champion, are no longer required.
At the same time, broader regulatory discussion has become more closely linked to growth and competitiveness across the UK financial services. That creates a slightly different backdrop from the one firms were operating in during the early stages of implementation.
For many firms, the Consumer Duty is now moving beyond its original implementation phase and becoming part of day-to-day supervisory expectations, as Joe Norburn, CEO, TCC Group, explains…
The focus has shifted from structure to judgement
During the early stages of the Consumer Duty, firms could demonstrate progress quite visibly. Boards approved frameworks, reporting lines were redesigned and customer journeys were reviewed in detail. There were tangible actions the regulator could point to and firms could evidence. The challenge firms face now is less procedural.
The FCA’s reflections on year two Consumer Duty board reports showed that governance and board engagement had generally improved across the market. At the same time, the regulator’s attention appeared to move more towards how firms interpret customer outcomes and respond when risks begin to emerge.
That requires a different level of judgement. Extensive management information alone rarely explains whether customers are genuinely receiving good outcomes. Stable complaint numbers or positive satisfaction scores do not necessarily mean customers fully understand products or receive effective support when circumstances change.
Boards are therefore being pushed into more difficult discussions around intervention, accountability and commercial trade-offs. Consumer Duty reporting is becoming less about proving governance exists and more about showing how decisions are made when customer outcomes are uncertain or potentially deteriorating. In many respects, that reflects the FCA’s longer-term ‘show me, don’t tell me’ approach to outcomes and culture.
Consumer Duty now sits within a broader regulatory environment
The wider political and economic backdrop has also changed over the past year. Supporting economic growth and competitiveness across the UK financial services has become a clear priority within the wider political and regulatory agenda.
A few years ago, much of the FCA’s focus was naturally centred on implementation. Today, the regime is more embedded and less reliant on highly visible messaging. The move away from formal expectations around board champions also reflects a broader regulatory environment increasingly focused on proportionality, competitiveness and reducing unnecessary governance burdens on firms.
More importantly, customer outcomes still sit underneath many of the areas attracting regulatory scrutiny. Questions around vulnerability, product governance, communications and support standards continue to feed directly into supervisory assessments, even where they are not always framed explicitly as Consumer Duty issues.
In practice, firms are increasingly being assessed on how customer outcomes influence wider governance and commercial decision-making rather than the Consumer Duty being treated as a separate compliance exercise.
The harder part comes after implementation
The implementation phase of any regulation naturally creates momentum. Senior attention is concentrated, budgets are prioritised, and firms mobilise quickly because expectations are clear. Maintaining that focus several years later is more difficult.
With firms now moving into a more mature phase of Consumer Duty oversight, most have completed the bulk of the original implementation work. Governance structures are established and reporting cycles are familiar. The challenge is whether firms will continue to apply the same level of scrutiny once the initial urgency fades and commercial pressures return to the forefront.
Boards are increasingly being asked to assess more subjective issues around customer understanding, vulnerability and support quality, areas where dashboards alone rarely provide complete answers.
The firms most likely to navigate this best will be those that continue to treat Consumer Duty as part of everyday decision-making rather than a finished regulatory programme.
Conclusion
The Consumer Duty has not become less important. What has changed is the regulatory and political environment surrounding it.
The implementation phase is over, but expectations around customer outcomes remain firmly in place. Firms are now operating in a supervisory environment shaped by both consumer protection and economic growth, creating a more complex balance than existed during the regime’s rollout phase.
For many firms, the challenge is no longer building Consumer Duty frameworks, but proving those frameworks are leading to effective decisions and better customer outcomes over time.
Photo by Towfiqu barbhuiya on Unsplash
