The shift firms can’t ignore
Consumer Duty isn’t new anymore — but the FCA’s expectations are evolving fast.
In its latest updates, the regulator makes one thing clear: the conversation has moved on from “have you implemented Consumer Duty?” to “can you prove it’s working?”
This is a subtle but critical shift. It means firms are no longer judged on policies or frameworks alone, but on whether customers actually experience better outcomes.
At the same time, the FCA is simplifying its rulebook — removing duplication and giving firms more flexibility. But that freedom comes with a trade-off: greater accountability.
A deeper look at where the FCA is focusing
Rather than introducing new rules, the FCA is leaning heavily on Consumer Duty itself. Its 2026 focus areas are all about how well firms are embedding the principles into day-to-day operations.
One of the biggest areas under review is how firms design and deliver their customer journeys. The regulator is taking a closer look at whether products are genuinely meeting customer needs, how decisions are presented, and whether points of friction help or hinder good outcomes.
Closely linked to this is the question of customer understanding. It’s no longer enough for information to be available, it has to be clear, timely and usable. The FCA is actively assessing how firms communicate, and whether those communications lead to informed decisions.
Behind all of this sits a growing emphasis on data. Firms are expected to monitor outcomes effectively, identify where things go wrong, and take action quickly. That requires more than dashboards. It requires insight.
Fair value is still under the microscope
If there’s one area where many firms continue to struggle, it’s price and value.
The FCA knows this, which is why it’s running detailed reviews across sectors including insurance, pensions and premium finance. These studies go beyond pricing to examine incentives, customer behaviour, and whether products deliver real value over time.
The direction of travel is clear: firms must be able to explain, evidence and defend how they deliver fair value. Where they can’t, the regulator has signalled it will act.
Sector pressure is increasing
While Consumer Duty applies across the board, some sectors are facing more immediate scrutiny.
In banking, the FCA is looking at whether SME customers receive fair value. In consumer credit, it’s questioning whether people truly understand what they’re signing up for, especially in complex or promotional offers. Insurance and investment markets are also under review, particularly where products are difficult to understand or carry higher risk. For firms in these areas, this isn’t abstract regulation but it’s direct supervision.
Simpler rules, tougher expectations
Alongside this increased scrutiny sits an important development: the FCA is actively reducing regulatory complexity.
Following industry feedback, it has committed to streamlining guidance, retiring outdated documents, and allowing more flexibility in how firms communicate with customers.
On the surface, this looks like a win for firms. But the intention is not to lower standards but to shift responsibility.
By moving away from prescriptive rules, the FCA is placing more emphasis on outcomes. Firms have greater freedom in how they comply, but far less room for poor results.
The real challenge for firms
Taken together, these updates highlight a new reality. Consumer Duty is no longer a compliance project but more of an ongoing operational discipline. It touches product design, data strategy, customer experience and governance all at once.
The firms that succeed won’t be those with the most documentation. They’ll be the ones that can clearly answer three questions:
- Are customers getting good outcomes?
- How do you know?
- What are you doing when they’re not?
Answering those consistently and with evidence is now the standard.
The FCA’s direction is deliberate. By simplifying rules and strengthening expectations, it is embedding Consumer Duty as the foundation of financial regulation.
For firms, that means one thing above all: doing the right thing for customers is no longer enough … you have to prove it.
At Worksmart, we’re dedicated to helping firms by providing them with practical interpretations of regulatory matters together with RegTech to help support firms in achieving their regulatory obligations. Get in touch with our knowledgeable and experienced team and let them guide you to the solution you need.