FCA sets out what good looks like on products and services — and where firms are still falling short

Worth reviewing — all firms in Consumer Duty scope.

The FCA has published good and poor practice findings on the products and services outcome under the Consumer Duty, based on a qualitative survey of 38 firms across banking, insurance, payments and e-money, asset management, consumer investments, funeral plans, and consumer finance, conducted in October 2025. The review introduces no new rules, but it tells you precisely what the FCA expects to see when it comes knocking.

On product design, the FCA found leading firms building detailed customer profiles — one created seven, segmented by behaviour, motivation, and service expectations — and using negative target markets to identify customers for whom a product would be unsuitable. The recurring weakness is the opposite: firms selling higher-risk products that acknowledged the risks but failed to explain why their defined target market was appropriate given those risks. That gap is a breach of PRIN 2A.3.4R(1), which requires target market definitions to reflect the product's risk profile.

On vulnerability, good practice included a firm offering voice control in its app for customers with dexterity issues and a sign language option for identity verification, as well as a restricted supplementary debit card allowing caregivers to purchase essentials without exposing the account holder's full funds. The shortcoming the FCA flagged is conflating identification with support: some firms direct vulnerable customers to third parties but do not address how the product itself meets those customers' needs.

On monitoring, the FCA praised firms using Voice of the Customer dashboards and tracking behavioural signals such as spikes in early product cancellations as indicators of poor outcomes. One firm saw a 45% reduction in ATM withdrawal complaints within three months of adding clearer in-app information and updated staff training. The weaknesses: some firms, particularly smaller ones, relied almost entirely on complaint volumes as their outcome indicator, and others introduced meaningful changes but could not demonstrate any quantifiable improvement in customer outcomes: one added a self-serve loan repayment rescheduling tool but had no data to show it had helped.

Read this alongside the FCA's second Enforcement Watch, published at the same time. There are now 11 open investigations into potential Consumer Duty breaches, up from 6 in the first edition published in January 2026. The FCA carried out 382 supervisory interventions in the last financial year, and around 30 skilled person reviews have referenced the Duty since it came into force.

Taken together, those figures make clear the tolerance period for embedding the Duty has passed.

Two caveats before acting. First, if your product is subject to PROD 3, PROD 4, or PROD 7, PRIN 2A.3 does not apply, though the FCA still encourages you to consider the good practice examples. Second, the FCA has an open consultation on Consumer Duty scope and proportionality (CP26/23) and advises firms to review it before making major process changes in response to these findings.

Sources

• Products servicesfca.org.uk
• Enforcement watch 2fca.org.uk