The compressed implementation window for the Consumer Duty, combined with the scale and volume of policy requirements, has left many firms facing tough prioritisation decisions. Few organisations of significant size and complexity can declare a completely ‘clean bill of health’ and it is universally recognised that there is more to do on the journey to customer centricity.

The FCA have signalled their intent through various initiatives to target areas where they think that customers are at significant risk of harm. These include their 14-point action plan to ensure that savings rates are being passed on appropriately, as well as the mortgage charter, intended to provide greater flexibility to those facing increasing mortgage repayments.

We have detailed areas where firms have found it challenging to implement the Duty’s specific requirements, and identified four key areas where focus and investment should be considered for delivery within Day 2.

1. Residual Day 1 Activity

Many firms have rightly focused efforts and resources on products and journeys where there is the greatest risk of customer harm, as well as on uplifting relevant frameworks and policies. Any residual review activity or outstanding activity for Day 1 should be carried out as an immediate priority.

Where firms have chosen to defer the fixing of identified customer harms to ‘business as usual’ status, they should ensure that a robust tracking process is in place to confirm that the fix for each item is completed, embedded, and evidenced.

2. Embedding Activity

The new control frameworks that were implemented during Day 1 will need further time and use to demonstrate full adoption. Enhanced product review processes, as an example, will require further work to acquire the necessary data and management information to substantiate assessments.

The compressed implementation period for Day 1 offered limited scope to provide deep and role specific training. Firms should now complete training based on a deeper understanding of the policy, and senior leaders should continue to take the opportunity to reinforce the policy by setting the tone from the top.

Customer Outcomes Testing and Monitoring should be utilised to validate the impact of newly established systems and controls, and to determine if there is a corresponding uplift in the quality of customer outcomes.

3. Back Book Review

The review of off sale products should be informed by the lessons gained from Day 1 activity. The metrics and criteria used to substantiate assessments of on sale products might not be the same for closed products but should be considered.

Firms must enter the closed book review with a plan for how to address thematic findings. Options should include changes to product characteristics, but firms should also consider their product simplification agenda to reduce the number of product variants that may complicate the review.

There is also a greater likelihood that firms will identify issues requiring redress, and these should be accrued for accordingly. We provide further insight on how firms should tackle the back book review

4. Capability Build

Firms should take this opportunity to invest in key capabilities within their business to enable more effective harm prevention while also enhancing the customer experience. This should extend into firms considering new innovative solutions to support this agenda.

Fair Value and Target Market

  • Firms should take the opportunity to invest time and resources to develop enduring capabilities in the following area.
  • We have observed that firms have found this challenging, as they have not always considered behavioural characteristics within their Target Market definition, nor have they carefully considered when completing Fair Value Assessments.
  • A key FCA area of focus is that firms can demonstrate how different customer segments receive different outcomes. Firms should segment customer cohorts using personas, based on behaviours such as withdrawal frequency for savings account, unarranged overdraft use, and/or product switching.

Ongoing Monitoring, Management Information, and Board Assurance

  • Boards should be preparing for their annual assessment of the firm’s monitoring and actions, in respect of the Duty, ensuring that the report is based on robust management information.
  • Boards should assure themselves that underlying data is sufficiently granular to provide customer-cohort-level insight, and that there are robust actions in place to address areas of customer harm. Achieving a single view of a firm’s customers through accurate and accessible data should be a priority for firms as part of their Day 2 programmes. Adopting a single platform for disparate data sources and enabling insights that are predictive rather than responsive will enable firms to prevent harm.

Testing of Customer Understanding

  • We have observed varying levels of maturity in the effectiveness of testing conducted by firms about the quality of their communications and the level of understanding by their customers.
  • Firms should prioritise testing their communications based on how likely it is that customers may suffer harm if the information provided is not properly understood.
  • Firms need to complete sufficient testing across a broad set of communication types and channels to gain confidence that their customers have the right insights to make informed decisions.
  • Firms should also establish an assessment process to help them receive feedback to improve communications methods.


  • Firms must address the heightened expectations to consider vulnerability throughout the product and customer lifecycle.
  • Focus should be given to proactively identifying transient vulnerabilities. Where customer spending behaviours signal states of poor financial resilience, treatment plans as well as access needs for these customers should be considered. Firms should be able to determine whether their products disproportionately impact vulnerable groups.
  • We provide further insight on how to transform in the age of complex customer vulnerability here.