Consumer Duty Two Years On: What Finance Teams Learned

The Consumer Duty has applied to products and services open to sale or renewal since 31 July 2023, and to closed products and services since 31 July 2024. It is now more than three years since it first applied and more than two since it reached the closed book. That is long enough for firms to have produced several annual board reports, been through supervisory engagement, and discovered where their arrangements were weaker than they assumed. The pattern that has emerged is consistent and it is not the one most firms expected: the difficulty has been much less about compliance frameworks and much more about finance data that nobody had ever needed to produce. This piece sets out what finance functions have actually learned, what they fixed, and what still catches firms out.

For the rules themselves, the FCA’s Consumer Duty pages remain the authoritative source. Our guide to Consumer Duty MI covers what finance has to produce, and FCA Consumer Duty: what it means for your finance function covers responsibilities, governance and skills; this piece is about what firms discovered in doing it.

Where the Duty stands now

Some of the expectations firms built their first implementation around have since moved.

Date	What happened
July 2022	The FCA published the final rules in policy statement PS22/9, with non-Handbook guidance in FG22/5.
31 July 2023	The Duty applied to products and services open to sale or renewal.
31 July 2024	The Duty extended to closed products and services; firms’ first annual board reports were due.
December 2024	The FCA published its review of first annual board reports from 180 firms.
February 2025	The FCA confirmed it no longer expects firms to appoint a board-level Consumer Duty champion.
June 2026	The FCA consulted on scope and proportionality in CP26/23.
18 September 2026	CP26/23 closed. Final rules are expected in the first quarter of 2027.

The core obligations — outcome monitoring, the fair value assessment and the annual board report — have not changed; the FCA’s emphasis on proportionality has.

Lesson one: the hard part was product costing, not compliance

The fair value assessment requires a firm to demonstrate that what a customer pays is reasonable relative to the benefit they receive. Doing that properly needs the cost of providing the product, the revenue earned from it, and the margin by product and by customer segment.

A great many firms discovered they had none of that at the required granularity. Revenue was tracked by entity or channel rather than product; costs were allocated to departments rather than to products; and nobody had ever needed a customer-segment view because no regulation had asked for one.

That is a management accounting build, not a compliance exercise — ordinary costing principles of the kind the CIMA syllabus covers, applied at a granularity nothing previously required, and it takes months rather than weeks. Firms that treated the first board report as a documentation task and only then discovered the costing gap lost a year. The ones that recognised it early started the costing work as a finance project in its own right — which is the single most useful thing any firm still catching up can do now.

The choice of method matters more than it first appears. Shared costs — servicing, technology, compliance, premises — have to be spread across products on some basis, and the basis chosen can move a product from apparently fair value to apparently excessive margin. Activity-based approaches usually suit the Duty better than simple percentage allocations, because the question is what it costs to serve a particular group of customers; our comparison of standard costing and activity-based costing sets out the trade-off, and the pricing logic is close to the work described in how management accountants support pricing decisions.

Lesson two: taxonomies that will not reconcile

The second recurring discovery, and the one that persists longest. Compliance counts complaints by one product hierarchy. Finance reports margin by another. Operations tracks service metrics by a third. The board then asks the obvious question — are the products generating the most complaints also generating the highest margin? — and nobody can answer it without a week of manual mapping.

The firms that solved this did something unglamorous: they agreed a single product taxonomy across finance, compliance and operations, and mapped everything to it once. It is a data governance exercise rather than a regulatory one, and it pays back every year thereafter. Our guide to data quality and the finance function covers the general discipline, and compliance and finance: different numbers looks at why the two functions so often disagree.

Lesson three: averages conceal exactly what the Duty asks about

Early board reports were frequently built on aggregate figures — average margin, overall complaint rates, total remediation cost. The regime is concerned with outcomes across customer groups, including those with characteristics of vulnerability, and an aggregate view is structurally incapable of showing that.

The uncomfortable finding for several firms was that a product delivering fair value on average was delivering poor value to an identifiable group — long-standing customers on legacy pricing, or a segment paying for features they never used. That is precisely the finding the exercise exists to surface, and firms that segmented properly found it in year one rather than having it pointed out to them later. The FCA’s own review of first board reports listed analysis of different customer types among its areas for improvement, which suggests the lesson was not learned evenly.

Lesson four: annual assembly is visible

The rules expect firms to monitor outcomes and review them regularly. A board report assembled in the six weeks before it is due reads exactly like what it is, and it produces two problems: the data is retrospective rather than monitored, and the finance team is doing a year’s work in a quarter alongside everything else.

The firms that settled into this well moved the core measures into the regular reporting cycle — product margin by segment, complaints mapped to products, remediation cost tracked as it arises — so the annual report became a summary of what the board already knew. That is what the regime intends, and it is considerably less work in aggregate than the alternative. Our guide to what the board actually reads covers how to present those measures.

Lesson five: nobody owned it

The structural finding, and the one that explains most of the others. The Duty sits across finance, compliance, product and operations. Where no single person owns the MI end to end, it is produced by whoever is available, differently each time, with different definitions.

Naming an owner is the single most effective organisational decision available here — and where the responsibility is formally allocated, the SM&CR framework determines to whom. In our experience, firms that have named an owner find each subsequent cycle considerably easier. In practice the owner tends to sit in finance in mid-sized firms — usually a finance business partner or FP&A role rather than a control one, because the work is analytical and cross-functional. Our guide to SMCR for finance teams explains how senior manager responsibilities map onto finance roles.

What the FCA’s reviews have said

Of the FCA’s good and poor practice reviews on the Duty, two are particularly relevant to finance teams.

Fair value frameworks

Before the Duty took effect, the FCA reviewed the fair value assessment frameworks of 14 firms and published its observations in Consumer Duty: findings from our review of fair value frameworks. The publication restates that firms must consider at least the nature of the product and its benefits, any limitations, and the expected total price customers will pay, including all fees and charges over the lifetime of the relationship. The last is squarely a finance data requirement. The FCA has since published sector-specific material, including good and poor practice on fair value in consumer finance.

First annual board reports

In December 2024 the FCA published Consumer Duty board reports: good practice and areas for improvement, based on the first annual board reports of 180 firms, and updated it in February 2026 with additional insight for smaller firms. It identified five areas for improvement, and they line up closely with the lessons above:

• Better data quality — some firms lacked the data quality to justify their conclusions or to give their boards adequate assurance.
• A comprehensive view across distribution chains — some reports did not show adequate information sharing with third parties in the chain.
• Analysis of different customer types — including customers with characteristics of vulnerability.
• Challenge from the board — it was not always evident that the governing body had effectively challenged the report.
• Taking effective action — action plans often lacked timescales, owners and clarity on the data that would evidence good outcomes.

Data quality, segment analysis and the evidence behind action plans all depend on numbers that finance produces and controls. For the wider context of how supervisors look at finance, see what the FCA expects from your finance function.

What still catches firms out

Four things, more than two years after the Duty reached the closed book.

Foregone revenue is under-evidenced. Where a firm has chosen not to charge, waived a fee or exited a product on fair-value grounds, that is direct evidence of the Duty operating — and it shows up in finance’s numbers rather than anywhere else. Firms routinely fail to capture it.

Distribution chains. Where intermediaries or partners sit between the firm and the customer, the total cost to the customer across the chain is what matters. Firms with visibility of only their own margin have an incomplete picture — and the FCA’s board report review named distribution chains as an area for improvement.

Legacy and closed books. The population where value questions are most likely to arise and the data is oldest and worst.

And key-person concentration. The MI is frequently produced by one person who understands the mapping, with none of it documented — the same pattern seen across regulated finance generally.

What is changing next

Since 2025 the FCA has signalled a more proportionate approach to the Duty as part of a wider effort to simplify its rulebook. Two developments matter for finance teams.

The board champion has gone. PS22/9 originally expected firms to appoint a board-level Consumer Duty champion, ideally a non-executive. In February 2025 the FCA confirmed it no longer expects firms to have one, although firms may keep the role if they find it useful. Removing the champion does not remove the board’s responsibility for reviewing and approving the annual assessment, so the data requirement is unchanged.

CP26/23 on scope and proportionality. In June 2026 the FCA consulted in CP26/23 on changes that include removing business with non-UK customers from the Duty’s scope, clarifying how firms in a distribution chain can rely on one another, and confirming that board oversight should be proportionate and focused on matters the firm is responsible for. The consultation closed on 18 September 2026, and the FCA has said it expects to publish final rules in the first quarter of 2027.

The practical message is that the core obligations are not going away. Firms with international customers or a mid-chain role may see the burden reduce at the edges. Fair value assessment, outcome monitoring and the annual board report remain, and the FCA continues to publish good and poor practice. Simplification is not a reason to pause investment in the data.

What this has meant for hiring

The Duty has created demand for a profile that barely existed before it came in: someone who can do product-level and segment-level commercial analysis and understands what the output has to demonstrate. That is finance capability plus regulatory literacy, and the combination is scarce.

Two practical points for firms recruiting into it. Specify the analytical half properly — a candidate who can build product margin by customer segment from imperfect data is more valuable than one who knows the rules but cannot produce the numbers. And test the joinability problem directly: ask how they would produce margin by segment where the finance system and the customer system define products differently. It is the real work, it is unglamorous, and the answer separates people who have done this from people who have read about it. Our guide to hiring regulatory experience covers the wider specification question.

On pay, regulated-firm finance roles typically carry a premium of around 15–25% over commercial equivalents. As a reference point, a Financial Controller at an FCA-regulated firm in London typically earns £75k–£110k at an investment firm and £65k–£95k at a fintech or payments institution; our guide to why regulated finance roles pay more explains the reasons.

Many firms need the costing model and the product taxonomy built once, properly, and then run by the existing team. An interim business partner or management accountant can design and document the model and hand it over; a fractional Financial Controller can give a smaller firm regulated-sector experience without a full-time salary. Interim and fractional candidates can usually be presented within days, and permanent searches typically produce a shortlist within one to two weeks — see fractional and interim finance in FCA-regulated firms. Chief Finance Officer (SMF2) appointments are handled by our sister firm FD Capital, and compliance oversight appointments such as SMF16 and SMF17 by SMF Capital.

A checklist for the next board report cycle

Questions worth answering now rather than in the final six weeks:

• Is there a single named owner for Duty MI, and is it written into a job description?
• Do finance, compliance and operations use one product taxonomy, mapped once and maintained?
• Can we show revenue, cost and margin by product and by material customer segment, with a documented cost allocation method?
• Can we show the total cost to the customer across the distribution chain, not only our own margin?
• Do the core measures run monthly or quarterly, so the annual report summarises what the board already knows?
• Is the method documented well enough that someone other than its author could run it?

Frequently asked questions

How long has the Consumer Duty applied?

Since 31 July 2023 for products and services open to sale or renewal, and since 31 July 2024 for closed products and services.

What is CP26/23 and when will it take effect?

CP26/23 is the FCA’s June 2026 consultation on the Duty’s scope and proportionality, covering non-UK business, distribution chains and board oversight. It closed on 18 September 2026, and final rules are expected in the first quarter of 2027.