Consumer Duty came into force in July 2023. Most firms spent the months before that deadline building implementation plans, updating policies, revising communications, and appointing a Consumer Duty Champion. That work was necessary. But it was only the beginning.
The FCA’s supervisory focus has shifted. It is no longer asking whether firms implemented Consumer Duty. It is asking whether Consumer Duty is actually delivering good outcomes for customers — and whether firms can demonstrate that it is. Those are harder questions, and the honest answer for many firms is that they cannot yet answer them to the FCA’s satisfaction.
This piece is about where the gap is, and what closing it requires.
What the FCA Is Now Looking For
The FCA has been clear that Consumer Duty is not a one-time compliance exercise. It expects firms to monitor and evidence customer outcomes on an ongoing basis, to report to their board on whether those outcomes are being met, and to act where they are not.
The three things the FCA consistently looks for when it reviews a firm’s Consumer Duty framework are:
An annual board report that means something
Every firm with retail customers is required to produce an annual report to its board reviewing whether it is delivering good outcomes under the Duty. The FCA has reviewed a significant number of these and found that many do not meet the standard. Common failings: the report is a narrative summary of actions taken rather than an evidenced assessment of outcomes achieved; it relies on management information that does not measure what the Duty actually requires; and the board is presented with conclusions rather than the underlying data needed to challenge them. A report that tells the board things are broadly satisfactory, without the MI to substantiate that, is not what the FCA expects.
Outcome monitoring genuinely connected to the four outcomes
The Consumer Duty requires firms to monitor outcomes across four areas: products and services, price and value, consumer understanding, and consumer support. The FCA’s expectation is that this monitoring is specific, measurable, and connected to real customer experience — not a set of process metrics dressed up as outcome data. Complaint volumes, for example, tell you something about consumer support but nothing about consumer understanding. The question is whether your monitoring framework is actually capable of detecting poor outcomes before customers are harmed, or whether it would only identify a problem after the fact.
Fair value assessments that are live, not filed
Firms were required to carry out fair value assessments as part of their initial Consumer Duty implementation. The FCA’s finding is that many firms completed those assessments in 2023, filed them, and have not revisited them since. A fair value assessment that does not reflect current pricing, current product features, and current market conditions is not fulfilling its purpose. The FCA expects these to be reviewed regularly and to influence commercial decisions when they identify a value gap.
Where Crypto and Fintech Firms Are Specifically Exposed
Consumer Duty applies to any firm dealing with retail customers. For crypto and fintech firms, there are several areas where the FCA’s supervisory expectations are particularly acute.
Consumer understanding in high-risk products
The FCA’s Consumer Duty rules on consumer understanding require firms to test whether customers actually understand what they are buying — not just whether disclosures have been made. For firms offering crypto investments or complex financial products, this is a high bar. A customer who has completed an appropriateness assessment and received a risk warning has not necessarily understood the product. The FCA expects firms to have evidence of how they test comprehension, what they do when comprehension is poor, and how they adjust their approach as a result.
Fair value in complex fee structures
Crypto and fintech firms often have fee structures that are complex, variable, or embedded in spreads rather than stated explicitly. Fair value assessments for these products need to be able to articulate, in terms a retail customer could understand, what they are paying and what they are getting for it. If a firm cannot do that clearly, it is likely to have difficulty demonstrating fair value to the FCA.
Vulnerable customer identification in a digital model
Consumer Duty places a specific obligation on firms to identify and respond appropriately to customers in vulnerable circumstances. For many crypto and fintech firms, the customer interaction model is primarily digital and largely automated — which makes vulnerable customer identification genuinely difficult. The FCA does not accept the difficulty as an excuse. It expects firms to have thought through how vulnerability manifests in their specific customer base and to have built processes capable of identifying and responding to it.
Consumer support proportionate to product risk
The FCA expects the level of consumer support a firm provides to be proportionate to the risk and complexity of the product. Firms offering high-risk crypto investments cannot rely on a chatbot and an FAQ page as their primary consumer support mechanism. The FCA will look at whether the support available to a customer who is confused, in difficulty, or facing a loss is adequate for the product they hold.
Worth asking:
When did your firm last review its Consumer Duty board report, outcome monitoring framework, and fair value assessments against what the FCA actually expects to see? If the answer is “when we first implemented,” that is where to start.
The Difference Between Implementing Consumer Duty and Evidencing It
Implementation was about building the framework. Evidencing it is about being able to demonstrate, at any point, that the framework is working — that customers are actually receiving good outcomes, that the board is genuinely overseeing this, and that the firm acts when outcomes fall short.
The distinction matters because the FCA’s supervisory approach to Consumer Duty is increasingly evidence-based. It is not conducting compliance audits asking firms to show they have a Consumer Duty policy. It is asking firms to show what outcomes their customers are actually experiencing and how they know.
Firms that can answer that question with specific data, connected management information, and a board report that reflects genuine challenge are in a strong position. Firms that can produce documentation but not evidence are in a much more exposed one — and the FCA’s experience of reviewing Consumer Duty frameworks suggests that the second group is larger than most compliance leads would be comfortable with.
Final Thought
Consumer Duty implementation was the regulatory floor, not the destination. The FCA’s supervisory focus in 2026 is on what comes after implementation: whether the framework is genuinely embedded, whether it is producing good outcomes, and whether the board can account for those outcomes with evidence rather than assurances.
The firms best placed going into the second half of 2026 are those that have moved from treating Consumer Duty as a compliance project to treating it as an ongoing operational obligation. The firms most exposed are those that completed implementation, filed the documentation, and have not revisited it since.
If you want to understand where your Consumer Duty framework stands against the FCA’s current supervisory expectations, contact LHI Consulting for a free 30-minute consultation.
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This article is for general information purposes only and does not constitute legal or regulatory advice. LHI Consulting is a trading style of LHI Holdings Ltd, registered in England and Wales, No. 11496647.
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FAQs
Consumer Duty came into force in 2023. What has changed since then?
The rules themselves have not changed materially, but the FCA’s supervisory focus has. In the period immediately following implementation, the FCA was primarily assessing whether firms had carried out the required implementation steps. Its focus has since shifted to outcomes: whether the framework firms built is actually delivering good results for customers, and whether firms can demonstrate that with evidence. Annual board reports, outcome monitoring, and fair value assessments are now the primary lens through which the FCA evaluates Consumer Duty compliance.
What does the FCA expect from an annual Consumer Duty board report?
The FCA expects the report to be an evidenced assessment of whether the firm is delivering good outcomes across the four areas of the Duty — not a narrative of actions taken. It should be supported by specific management information that the board can challenge, and it should include an assessment of where outcomes are falling short and what the firm is doing about it. A report that concludes things are broadly satisfactory without the data to support that conclusion does not meet the FCA’s expectation.
How often should fair value assessments be reviewed?
The FCA does not prescribe a fixed frequency, but its clear expectation is that fair value assessments are live documents reviewed regularly — not a one-time implementation exercise. Where pricing, product features, or market conditions change, the assessment should be updated. Firms that completed their fair value assessments in 2023 and have not revisited them are unlikely to be able to demonstrate compliance if asked.
How should crypto and fintech firms approach vulnerable customer identification in a digital model?
The FCA acknowledges that digital-first firms face genuine challenges in identifying vulnerability, but does not accept that difficulty as a reason for inaction. Firms are expected to have considered how vulnerability manifests in their specific customer base — through transaction patterns, customer support interactions, complaint data, or other signals — and to have built processes capable of identifying and responding to it. A blanket approach of treating all customers the same will not satisfy the FCA’s expectations under the Duty.
What is the fastest way to identify gaps in our Consumer Duty framework?
Start with the three areas the FCA focuses on most in its supervisory reviews: your annual board report (does it evidence outcomes or describe processes?), your outcome monitoring framework (does it measure what the Duty requires or proxy metrics?), and your fair value assessments (have they been reviewed since implementation?). A structured gap analysis against the FCA’s published supervisory findings will quickly identify where your framework needs strengthening. Specialist support can accelerate that process significantly.