Consumer Duty: A Complete Guide to FCA Requirements and Compliance
The Financial Conduct Authority (FCA) Consumer Duty represents a significant shift in how financial services firms are expected to deliver good customer outcomes. Introduced to raise standards of consumer protection, this duty requires firms to act in good faith, avoid foreseeable harm and support customers in achieving their financial objectives.
For firms operating in banking, insurance, investments and other regulated sectors, Consumer Duty is not simply a regulatory requirement; it requires a cultural shift in how products are designed, communicated and delivered.
Consumer Duty is an FCA regulation designed to improve outcomes for retail customers across financial services. It introduces a higher standard of care and requires firms to put customers’ needs at the centre of their decisions.
Consumer Duty is based on three core behaviours:
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Acting in good faith
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Avoiding foreseeable harm
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Supporting customers to pursue their financial objectives
Unlike traditional rules-based regulation, Consumer Duty focuses on the outcomes customers experience rather than whether firms have simply followed a process.
Consumer Duty requirements for firms
For regulated firms, Consumer Duty requires evidence that they understand customer needs, assess whether products and services provide fair value, communicate clearly and provide appropriate support throughout the customer journey.
The Duty aims to:
Improve consumer understanding
Ensure products and services provide fair value
Reduce foreseeable customer harm
Strengthen customer support
Encourage firms to prioritise customer outcomes
Consumer Duty builds on previous FCA expectations around conduct, including Treating Customers Fairly (TCF), but introduces clearer accountability and stronger expectations around monitoring and evidence.
Learn how your employees can apply Consumer Duty in practice
Consumer Duty directly applies to FCA-regulated firms in the United Kingdom (UK) that provide products or services to retail customers.
This includes:
- Banks and building societies
- Insurance providers
- Investment firms
- Consumer credit firms
- Payment service providers
- Mortgage providers
- Financial advisers
It is important to note that this Duty applies throughout the customer journey so firms need to consider their responsibilities from the outset to when they are selling, servicing and reviewing products or services.
For financial services firms, Consumer Duty forms part of a wider FCA compliance framework covering areas such as conduct risk, financial crime prevention and operational resilience.
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The Consumer Duty Principle
The FCA introduced Consumer Duty through a new Principle for Businesses:
"A firm must act to deliver good outcomes for retail customers."
This principle sits alongside the FCA’s wider regulatory framework and requires firms to demonstrate that they are actively considering customer outcomes in their decision-making.
Learn more about the FCA regulatory framework.
Cross-cutting rules explained
Consumer Duty rules define the behaviours firms must demonstrate when delivering products and services to customers. As mentioned above, there are three cross-cutting rules:- Act in good faith
Firms need to act honestly and fairly towards customers while maintaining transparency. - Avoid foreseeable harm
Firms should identify potential risks and take action to prevent customers from experiencing avoidable harm. - Support customers to achieve their financial objectives
Customers should receive appropriate information and support from a firm throughout their relationship with them.
These three rules form the framework of the behaviour the FCA expects from a firm. Each rule should be applied in all areas of a firm’s activities and should influence decision-making at every level.
The four Consumer Duty outcomes
1. Products and services
2. Price and value
- Pricing structures
- Customer benefits
- Reasonable relationship between cost and value
3. Consumer understanding
- Ensure clear communications
- Use appropriate language
- Avoid unnecessary complexity
4. Consumer support
- Accessible support channels
- Identifying vulnerable customers
- Resolving issues effectively
Consumer Duty implementation requirements
Embedding Consumer Duty requires more than completing a regulatory exercise. Firms need to demonstrate ongoing oversight, monitoring and improvement.
Key implementation activities include:
Establish governance and accountability
Senior leaders should understand their responsibilities and ensure Consumer Duty is embedded into organisational culture.
Review products and services
Firms should assess whether products continue to meet customer needs and provide fair value.
Monitor customer outcomes
Organisations need appropriate data, management information (MI) and reporting processes to identify potential harm.
Train employees
Employees should understand how Consumer Duty applies to their role and how their decisions influence customer outcomes.
Introduction to Consumer Duty Course
Consumer Duty training requirements
Effective Consumer Duty compliance depends on employees understanding how regulatory expectations apply in practice.
Training can help firms:
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Build awareness of Consumer Duty responsibilities
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Embed customer-focused behaviours Demonstrate compliance readiness
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Support consistent decision-making across teams
Explore our Consumer Duty training solutions:
Consumer Duty Training Course
A comprehensive course designed to help employees understand Consumer Duty requirements and apply them in their roles.
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Introduction to Consumer Duty Training
An introductory course helping employees understand the purpose of Consumer Duty, key principles and their responsibilities.
Consumer Duty in the wider FCA compliance context/landscape
Consumer Duty is one part of a broader FCA compliance programme. Financial services firms may also need training across areas including:
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Is Consumer Duty mandatory?
Yes. FCA-regulated firms within scope of the Duty must comply with its requirements and demonstrate that they are delivering good customer outcomes
What training is required for Consumer Duty?
The FCA expects firms to ensure employees understand their responsibilities under Consumer Duty. Training should be relevant to employees’ roles and help embed the behaviours needed to support good customer outcomes.
How often should Consumer Duty training be completed?
Firms should determine appropriate training frequency based on their risk profile, employee responsibilities and regulatory obligations.
Does Consumer Duty apply to all employees?
While responsibilities differ by role, employees involved in customer outcomes, product design, sales, service delivery or support should understand how Consumer Duty applies to their work.