FCA Highlights Good Practice and Gaps in Consumer Duty Outcomes Monitoring

The UK's Financial Conduct Authority (FCA) has published a review outlining good practices and areas for improvement in how financial firms monitor customer outcomes under the Consumer Duty framework.

The review found that firms with structured, evidence-based monitoring frameworks were better positioned to identify customer risks, assess outcomes across the customer journey, and take timely corrective action. Stronger firms defined clear customer outcome expectations, combined multiple data sources rather than relying on single metrics, and used governance processes to track issues through to resolution.

The FCA also highlighted examples of firms using data analytics and AI to improve customer support and compliance. In one case, a firm introduced AI-powered customer service tools that reduced average response times from 22 hours to under two minutes while helping identify vulnerable customers for prioritised support. Other firms used customer testing, transaction analysis and targeted management information to improve onboarding, payment categorisation and verification processes.

However, the regulator identified several weaknesses across the industry. Some firms relied heavily on operational metrics without demonstrating how they reflected customer outcomes, while others lacked clear links between management information, decision-making and measurable improvements. The FCA also found shortcomings in governance, including limited board challenge, weak oversight of third-party providers, and insufficient testing to determine whether corrective actions had effectively addressed identified issues.

The FCA said firms should ensure their monitoring frameworks focus on customer outcomes rather than simply collecting management information. The regulator encouraged firms to use the findings to review their own governance, data and oversight arrangements, ensuring they can identify emerging risks, take appropriate action and demonstrate that interventions have improved customer outcomes.