On 16 April 2026, the Financial Conduct Authority (FCA) published observations in relation to the first two years of consumer duty board reports.

Background

The FCA explained that, under the Consumer Duty, firms must report annually on what their monitoring found about customer outcomes, and what actions they’ll take as a result.

In December 2024, the FCA had previously published it findings following review into firms’ approaches to completing the first annual Consumer Duty board report. As a result, in advance of the third cycle of consumer duty board reporting, the FCA have considered how firms have implemented the relevant requirements in year 2.

Summary

The FCA set out certain key findings in relation to certain examples of good practice in reporting in year 2:

  • Stronger governance and clearer Board oversight: The FCA explained that it has seen a shift in how governing bodies approach the Duty, in particular that Boards now formally review and approve reports, including explicit confirmation that they have considered and signed off actions and their firms are meeting their obligations.
  • Better action plans and ownership: The FCA also highlighted that firms are increasingly setting out comprehensive action plans, with clear responsibilities, timelines and progress updates with most reports now identifying accountable owners for improvements and track delivery status.
  • Broader and more insightful data: Finally, the FCA explained that in comparison to year 1, firms are drawing on a wider range of quantitative and qualitative data to demonstrate customer outcomes, including trend analysis, root cause assessments and comparisons across customer groups.

The FCA set out certain key findings in relation to certain areas for improvement in reporting in year 2:

  • Clearly link data to customer outcomes: The FCA emphasised that some firms presented extensive data without sufficiently explaining how it demonstrated good or poor outcomes and that, as a result, firms must push for analysis that goes beyond management information (MI) dashboards and provides insights, and firms should draw conclusions, identify emerging risks and be prepared to challenge their own practices where the data suggests that customers may not be getting good outcomes.
  • Monitor outcomes delivered by third parties: The FCA highlighted that the monitoring of outcomes in distribution chains was often weak, especially where firms rely on intermediaries or outsourcing partners. As a result, the FCA plan to consult on changes to rules and guidance relating to distribution chains this year, as well as publish best practice examples of how firms are monitoring outcomes under the Duty. 
  • Evidence meaningful Board challenge: The FCA made clear that, while most Boards reviewed and approved the reports, many did not adequately document the challenge they had provided, which makes it difficult to see how senior leaders tested the evidence they were given. As a result, Boards should ensure their minutes and papers clearly set out the discussions they had, the questions they asked and any follow up actions they requested. 
  • Deepen assessment of consumer understanding and support: The FCA also flagged that some reports still focused more heavily on products, services and value than on customer understanding and support, despite those being these are core outcomes under the Duty and that, as a result, firms should be able to evidence how they test communications, assess consumer comprehension and respond where consumer behaviours indicate misunderstanding or friction.