The FCA Consumer Duty came into full force on 31 July 2023 for open products and services, and on 31 July 2024 for closed products. Yet many firms — particularly fintechs and scale-ups — still have meaningful gaps in how they evidence compliance.
This guide sets out the four Consumer Duty outcomes, the most common implementation gaps we see in practice, and practical steps you can take to strengthen your position.
What the FCA Consumer Duty Requires
The Consumer Duty sets a higher standard of consumer protection in financial services. It requires firms to deliver good outcomes for retail customers across four areas:
1. Products and Services
Firms must design and deliver products and services that meet the needs of their target market and are not likely to cause consumer harm. This includes robust product governance — with documented target market assessments, product reviews, and MI to evidence outcomes.
2. Price and Value
Products and services must offer fair value — meaning the price charged is reasonable relative to the benefit provided. Firms must be able to justify pricing through a documented value assessment and demonstrate they are not exploiting behavioural biases.
3. Consumer Understanding
All consumer communications must support informed decision-making. This covers the entire customer journey — from marketing materials to contract terms, renewal notices, and exit processes. The standard is whether a reasonable retail customer would understand the information presented to them.
4. Consumer Support
Customers must be able to access the support they need, when they need it. This includes fair treatment of vulnerable customers, adequate resourcing of support channels, and removing unnecessary friction from complaints and redress processes.
The Most Common Gaps We See
Based on our advisory work with fintech and financial services firms, the following are the areas most frequently found to be insufficient at the point of review:
Gap 1 — Thin or absent MI frameworks
The Duty requires firms to monitor and evidence outcomes on an ongoing basis. Many firms have policies in place but lack the data infrastructure to generate meaningful MI — particularly around customer understanding and support outcomes.
Practical fix: Map your existing data sources against each of the four outcomes. Identify where you have no signal and design proxy metrics (e.g., complaint rates as a proxy for support quality, drop-off rates as a proxy for understanding gaps).
Gap 2 — Product governance documentation that doesn't match practice
Target market assessments and product approval documents are often treated as a one-off compliance exercise. The Duty requires them to be live documents, updated when products change or when MI suggests the target market is not being served well.
Practical fix: Build a product governance calendar with scheduled review triggers — including triggers based on MI thresholds, not just time.
Gap 3 — Vulnerability frameworks that stop at policy
The FCA expects firms to have operational processes, not just a vulnerability policy. This means staff training, escalation paths, and evidence that vulnerable customers are being identified and receiving appropriate support in practice.
Practical fix: Conduct a vulnerability customer journey test — trace a vulnerable customer scenario through your actual process end to end and identify where the experience deviates from policy intent.
Gap 4 — Inadequate board reporting
The Consumer Duty requires a Consumer Duty Champion at board level and regular board-level reporting on consumer outcomes. Many firms have neither the Champion role properly defined nor meaningful board packs in place.
Practical fix: Establish a quarterly Consumer Duty MI pack for the board. Include outcome data by product, complaint trends, value assessment results, and actions in flight.
What Fintechs Should Prioritise
For early-stage and growth-stage fintechs, the Consumer Duty creates a particular challenge: the obligations are significant, but resource constraints are real. Here is where to focus first:
- Conduct a Consumer Duty gap assessment — assess your current state against each of the four outcomes and identify your highest-priority gaps.
- Establish your MI framework — even a basic set of outcome metrics, reviewed quarterly, puts you ahead of many peers.
- Review your customer communications — start with your highest-volume journeys (onboarding, renewal, complaints) and test them against the "would a reasonable customer understand this?" standard.
- Document your value assessments — price justification is an area where the FCA has been increasingly active in its supervisory work.
- Get board ownership formalised — appoint a Consumer Duty Champion and establish a reporting cadence.
How KPN Advisory Can Help
We work with fintech and financial services firms to assess Consumer Duty compliance, identify gaps, and implement practical remediation plans. Our approach combines regulatory expertise with an understanding of the operational realities fintechs face.
Our Consumer Duty support includes:
- Consumer Duty Gap Assessment — a structured review against all four outcomes, resulting in a prioritised action plan
- MI Framework Design — building outcome monitoring that is proportionate and operationally viable
- Product Governance Review — assessing target market assessments, value assessments, and product approval frameworks
- Board Reporting Support — designing a Consumer Duty MI pack that meets FCA expectations
- Training & Awareness — practical sessions for compliance, product, and operations teams
If you would like to discuss your Consumer Duty position, get in touch for a no-obligation initial conversation.
This article provides general information only and does not constitute legal or regulatory advice. Firms should seek specialist advice tailored to their specific circumstances.