UK FCA findings of consumer duty outcomes monitoring

The UK Financial Conduct Authority (FCA) has published findings from its review of firms' approaches to monitoring consumer outcomes under the consumer duty, identifying good and poor practices. The FCA aims to help firms understand what is happening across the customer journey, identify poor outcomes or emerging risks, and take appropriate action.

In relation to strategy and frameworks, the FCA identified several areas for improvement. These included high-level frameworks that do not clearly define good and poor outcomes across key customer journeys or explain the thresholds used to assess them, as well as weak links between operational metrics (such as conversion rates or review completion) and actual customer outcomes. The FCA also found limited evidence of firms assessing whether outcomes differ across customer groups, including customers in vulnerable circumstances.

On data, management information (MI) and testing, some firms relied on a narrow or reactive set of indicators and could not consistently demonstrate how they used MI to anticipate issues, monitor outcomes or assess the impact of changes. Firms often relied heavily on lagging indicators and lacked clear thresholds or forward-looking metrics. Although many firms had set specific thresholds, they did not always explain how these were used to identify good or poor outcomes. The FCA also found that, while some firms identified friction in customer support journeys and agreed remedial actions, certain issues remained unresolved.

In relation to governance, oversight and culture, the FCA found that although firms generally described clear governance structures, practices were not consistent across the firms reviewed. In particular, it was not always evident how governance arrangements operated end-to-end, from identifying issues to testing whether remedial actions had improved outcomes. While boards typically receive regular updates on customer outcomes and are described as central to oversight, it was not clear how this information was used. Similarly, firms were often able to demonstrate that they identified issues and took action but provided less detail on the root causes of those issues or whether the actions taken successfully addressed them.

The FCA states that firms should use these findings to review their own approach to outcomes monitoring and consider whether the information they collect gives them a clear enough view of customer outcomes.

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