In 2026, the regulatory debate is no longer about whether firms have implemented the Consumer Duty. The question now is far more direct: can they clearly evidence strong FCA Consumer Duty outcomes under active supervision?
The implementation phase that dominated 2023 and 2024 has matured into an accountability phase. Supervisors are looking beyond policies, frameworks and dashboards to examine whether real customers are receiving fair value, clear communication and effective support. For UK firms, this marks a structural shift in how regulation operates.
As the Financial Conduct Authority continues to embed the Duty at the centre of its supervisory model, 2026 represents a decisive pivot — from process assurance to outcome verification.
What Are FCA Consumer Duty Outcomes in 2026?
The Consumer Duty is built around four core outcomes:
- Products and services
- Price and value
- Consumer understanding
- Consumer support
These outcomes require firms to design products that meet customer needs, ensure pricing delivers fair value, communicate clearly and provide effective post-sale support.
Confirmed Regulatory Position
The FCA requires firms to:
- Act to deliver good outcomes for retail customers
- Avoid foreseeable harm
- Enable customers to pursue their financial objectives
These obligations remain unchanged.
What Has Shifted in 2026?
The difference in 2026 is supervisory intensity. The regulator is increasingly testing whether firms can prove that FCA Consumer Duty outcomes are being delivered in practice not merely documented in policy.
The emphasis has moved from “Have you implemented?” to “Can you evidence?”
How Is the FCA Rebalancing Risk Through Active Supervision?
As Nikhil Rathi has consistently highlighted, the Consumer Duty is intended to reduce reliance on prescriptive, one-size-fits-all rules. Rather than expanding detailed regulation, the FCA is placing greater responsibility on firms to deliver and evidence outcomes.
This represents a regulatory rebalancing of risk.
Instead of the regulator attempting to anticipate every potential harm through detailed rulemaking, firms are expected to demonstrate that:
- Products meet identified customer needs
- Pricing structures deliver fair value
- Communications genuinely enable understanding
- Ongoing support prevents foreseeable harm
Where firms can clearly evidence positive FCA Consumer Duty outcomes, the need for additional prescriptive rules diminishes. Where they cannot, supervisory scrutiny increases.
Active supervision, therefore, does not necessarily mean more rules but it does mean greater accountability.
How Is the FCA Moving from Process-Based Compliance to Active Supervision?
Historically, compliance often focused on:
- Written procedures
- Annual policy reviews
- Board sign-off statements
In 2026, supervision is becoming increasingly data-led and outcomes-focused.
Supervisors are now examining:
- Claims acceptance and rejection trends
- Complaints patterns and root cause analysis
- Product cancellation rates
- Behavioural disengagement signals
The shift is subtle but significant. The regulator is less concerned with whether a firm can produce a compliant policy and more concerned with whether customers are experiencing fair treatment.
This is the operational reality of FCA Consumer Duty outcomes under active supervision.
Why Is Management Information (MI) No Longer Enough on Its Own?
Many firms enhanced their Management Information (MI) frameworks during implementation. However, legacy MI frequently measures process completion rather than customer experience.
The Limitation of Traditional MI
Examples include:
- Percentage of disclosure documents issued
- Average call waiting times
- Number of complaints logged
While useful, these do not necessarily confirm good outcomes.
Moving Towards Experience-Based Data
In 2026, firms should consider incorporating:
- Claims outcome ratios
- Value assessments against pricing changes
- Repeat contact patterns
- Drop-off points in digital journeys
Practical Scenario
An insurance provider may demonstrate 100% compliance with disclosure requirements. However, if claims data shows repeated disputes over exclusions, this may indicate poor consumer understanding. Under active supervision, the outcome not the disclosure checklist becomes central.
What Does the ‘Burden of Proof’ Shift Mean for Firms?
The burden of proof increasingly rests with firms. Supervisors expect organisations to proactively demonstrate delivery of FCA Consumer Duty outcomes.
Forensic Customer Journey Tracing
A practical method is to trace the customer journey from:
- Product design
- Target market identification
- Distribution
- Onboarding
- Ongoing servicing
- Final outcome
This allows firms to test whether the product genuinely met customer needs throughout its lifecycle.
Boards and Senior Managers must be able to show documented challenge, oversight and remediation where weaknesses are identified.
Is Vulnerability Now a Product Design Issue?
Vulnerability is no longer treated solely as a reactive support function.
Confirmed Expectation
The FCA requires firms to:
- Identify vulnerable customers
- Ensure outcomes are comparable to non-vulnerable customers
- Monitor harm indicators
Emerging Practice
Forward-looking firms are embedding vulnerability considerations into product design, pricing models and communications.
Some are exploring:
- Sentiment analysis
- Behavioural data monitoring
- Early warning indicators of financial stress
Technology is not mandated, but vulnerability must now be treated as a structural design issue rather than an afterthought.
What Do Boards Need to Prepare for Before 31 July 2026?
The second annual Consumer Duty Board Report is due by 31 July 2026.
Confirmed Requirement
Boards must:
- Review evidence of good outcomes
- Assess potential harm
- Confirm compliance
Strategic Expectation
Supervisors increasingly expect boards to challenge whether future strategy aligns with the Duty not merely review past data.
Questions boards should consider:
- Does growth create new harm risks?
- Are pricing models sustainable and fair?
- Is MI genuinely reflective of customer experience?
The report should demonstrate forward-looking accountability.
How Will Buy Now Pay Later (BNPL) Be Affected in July 2026?
BNPL providers must be fully compliant by 15 July 2026.
Key Areas of Focus
- Transparency of repayment terms
- Fair value assessments
- Treatment of customers in arrears
- Marketing clarity
Given concerns around repeat borrowing and affordability, FCA Consumer Duty outcomes in this sector will likely be assessed through behavioural and arrears data rather than marketing documentation alone.
What Is Targeted Support and Why Does It Matter?
Launching in April 2026, Targeted Support introduces a middle ground between regulated advice and generic guidance.
Its objective is to improve decision making without triggering full advice liability.
For firms, this creates governance complexity:
- Clear boundary definitions
- Harm prevention mechanisms
- Outcome monitoring
FCA Consumer Duty outcomes will remain the central measure of effectiveness.
Why Is Insurance Under Increased Scrutiny?
The FCA’s February 2026 review of premium finance models and its ongoing pure protection market study have intensified sector focus.
Areas Under Examination
- Interest costs in premium finance
- Commission structures
- Claims ratios
- Fair value assessments
Insurance firms must ensure pricing transparency and robust claims data monitoring to evidence positive outcomes.
How Has Governance Evolved Since 2025?
As of 27 February 2025, firms are no longer required to appoint a designated Consumer Duty board champion.
This provides governance flexibility, but not reduced accountability. Boards remain collectively responsible for ensuring FCA Consumer Duty outcomes are achieved and evidenced.
The regulator is also consulting on streamlining requirements for wholesale firms and asset managers to maintain proportionality and competitiveness.
These developments signal refinement not relaxation of the framework.
How Is Data-Led Supervision Changing Expectations?
The FCA is enhancing its data-detection capability, allowing it to:
- Benchmark firms
- Identify outliers
- Detect harm early
- Intervene more quickly
This reinforces the importance of continuous outcomes monitoring.
What Does Outcome-Based Compliance Look Like in Practice?
| Traditional Approach | 2026 Active Supervision Expectation |
| Policy documentation | Demonstrable outcome evidence |
| Process MI | Behavioural & journey data |
| Vulnerability escalation | Vulnerability embedded in design |
| Annual review | Continuous monitoring |
| Formal board sign-off | Documented board challenge |
Firms that align governance, MI and product design with measurable outcomes are better positioned for regulatory stability.
What Are the Risks of Failing to Deliver FCA Consumer Duty Outcomes?
Confirmed supervisory tools include:
- Supervisory intervention
- Skilled Person reviews
- Enforcement action
It is important to separate confirmed powers from speculation. The FCA already possesses enforcement authority; Consumer Duty strengthens the evidential basis for using it where harm is demonstrated.
Reputational impact may also arise where firms fail to evidence outcomes.
Conclusion
In 2026, FCA Consumer Duty outcomes are not a compliance project they are the operating standard for UK retail financial services.
The regulator’s direction is clear:
- Reduce prescriptive rule expansion
- Increase outcome accountability
- Reward firms that evidence positive customer impact
Active supervision represents a structural pivot. Firms that invest in journey analysis, board-level challenge, vulnerability-aware design and data-driven monitoring are more likely to experience regulatory stability.
Those relying solely on documentation and periodic reviews may find scrutiny intensifying.
The message for UK businesses is calm but decisive: demonstrate real outcomes, not just compliance.
FAQs
How frequently will the FCA assess Consumer Duty compliance?
Supervision is becoming more continuous and data-led rather than limited to periodic reviews.
Does the Duty apply to legacy products?
Yes, where retail customers continue to be affected, firms must ensure ongoing fair outcomes.
Is technology mandatory to meet expectations?
No specific technology is required, but firms must effectively monitor and evidence outcomes.
What should boards focus on in 2026?
Boards should focus on forward-looking strategy alignment, pricing fairness and vulnerability impact.
Can smaller firms meet active supervision standards?
Yes. Proportionality applies, but all firms must evidence good outcomes appropriate to their scale.
How does the removal of the board champion affect accountability?
Collective board responsibility remains. The requirement change offers flexibility, not reduced oversight.
Which sectors face the greatest scrutiny?
BNPL providers, premium finance models and pure protection markets are currently under particular attention.