Consumer Duty Outcomes Monitoring: What the FCA's 2026 Review Expects of Firms

On 27 July 2026, the Financial Conduct Authority (FCA) published Outcomes monitoring: good practice and areas for improvement, a review of how firms monitor consumer outcomes under the Consumer Duty. It introduces no new rules, no deadlines and no transitional arrangements. Its central message is that collecting data, listing metrics and reporting management information (MI) do not, by themselves, show that customers are receiving good outcomes. The FCA expects a firm to be able to explain what its information tells it, how that information identifies risks or issues, what action followed, and how the firm judged whether that action improved outcomes.

The review is relevant to firms in every sector subject to the Duty, including both manufacturers and distributors, and to the senior managers and boards that oversee outcomes monitoring. The FCA has set out separate expectations for smaller firms in each section, which makes this an unusually usable piece of supervisory material for a small intermediary as well as a large bank. Firms should use it to benchmark their existing arrangements, and in particular to test whether they could evidence the full chain from issue identified through to outcome improved.

What the FCA Reviewed and What It Found

The FCA reviewed firms across a range of sectors, sizes and business models, assessing board reports and responses to its information requests to understand how those firms monitor customer outcomes, use MI and oversee monitoring through their governance structures. It also surveyed 56 firms. The review covered three elements:

1. Strategy and framework for outcomes monitoring.

2. Use of data, MI and testing.

3. Governance, oversight and culture.

   
   

The findings are observations and supervisory expectations rather than new obligations. Where the FCA criticises practice, it anchors the criticism in existing requirements, citing PRIN 2A.9, PRIN 2A.9.2, PRIN 2A.9.11R, PRIN 2A.8.4R and PRIN 2A.8.5R, together with Chapter 11 of FG22/5, the FCA's finalised non-Handbook guidance on the Duty. Nothing in the publication changes those provisions.

Defining good outcomes product by product rather than in one broad statement

The clearest separation between stronger and weaker firms was definitional. Stronger firms defined what a good outcome looked like for each of their key products, describing what customers should experience at key stages such as joining, using the service and leaving, and linking those statements directly to their customer journeys so they could see where poor outcomes might arise. Some firms started from the key risks of harm in a product and translated those risks into practical, measurable definitions supported by indicators such as complaints, attrition and compliance monitoring results.

Weaker firms had a single broad definition of good outcomes and a list of performance indicators, without explaining what a good outcome looked like at each stage or how a given metric demonstrated it. Some used operational activity measures, such as conversion rates or review completion, as a proxy for customer outcomes. The FCA's concern is that this makes it difficult to say whether outcomes are good or poor, and harder to identify where particular customer groups, including people in vulnerable circumstances, may be faring worse.

Smaller firms are not expected to replicate this at scale. The FCA describes smaller firms that focused on their main product and the key stages of the journey, described good outcomes in plain language, and used a small number of existing indicators such as complaints, customer feedback, missed service standards and file checks. That was treated as a clear and workable approach, proportionate to business model, customer base and risk profile.

Thresholds and tolerances a firm can actually justify

Many firms set specific thresholds but could not explain what those thresholds were based on or why they indicated a good or poor outcome. The FCA gives the example of a firm with thresholds for complaints, file review pass rates, client retention and mortgage review engagement, which could not consistently explain the basis for them.

The contrast is instructive. One firm set targets from its own past performance, reviewed and challenged them through governance at least annually to make sure they were not too easy to meet, and in some cases set targets above historic performance to encourage improvement. A smaller firm set thresholds using a combination of historical performance, available benchmarks and senior management judgement. The FCA does not prescribe a method. It expects the firm to be able to articulate why the threshold is meaningful for identifying potential harm.

From MI to decision: the audit trail the FCA looked for

This is the heart of the review. Several firms collected relevant MI but could not show how it led to a decision or an improvement. In one example the firm could not consistently show what MI it had considered, where the MI had been discussed or challenged, what it decided, when it acted, or how it assessed the impact.

The published good practice examples are notable because they are all traceable end to end. One firm tested rejected-applicant data, found that some distribution channels were producing high volumes of applicants who lacked sufficient income or savings, and ended two paid affiliate relationships as a result. Another used complaints MI to identify delays where customers posted identity documents to complete withdrawals, piloted a multi-bureau verification approach, monitored the effect through committee and board reporting, and recorded a 5 per cent improvement in anti-money laundering pass rates and a 20 per cent improvement in bank verification pass rates. A third firm improved transaction categorisation after testing sample descriptions against external reference data and removing false positives, recording a 12.8 per cent uplift in categorisation accuracy.

In Compliance Angle's experience, most firms already hold enough data to build this trail. What is usually missing is a record that connects the MI pack to the minuted challenge, the decision, the owner and the follow-up test.

Testing whether remedies actually worked

The FCA drew a clear distinction between agreeing actions and evidencing improvement. One firm identified unclear live chat interactions, verification delays, repeat contact and inconsistent first-contact resolution, and agreed a package of actions including clearer expectation setting, stronger ownership, improved escalation handling and staff training. Later evidence showed customers were still being passed between agents and complex issues were not always resolved first time.

The FCA is explicit that a new tool or checklist does not, by itself, show that customer outcomes have improved. Stronger evidence came from firms that tested whether interventions reduced repeat contact, avoidable customer effort and unresolved journeys. One firm that introduced in-app chat, later extended with artificial intelligence routing and keyword recognition for potential vulnerability indicators, tracked the effect through support MI: average first response time fell from 22 hours to under two minutes over a six-month period, and average resolution time fell from four days to under three hours.

Vulnerability MI and the limits of aggregation

Some firms monitored outcomes for customers in vulnerable circumstances separately from other customers but did not segment those outcomes by vulnerability driver. The FCA cites a firm that aggregated its vulnerability MI rather than splitting it by drivers such as health, financial resilience or life events, noting that low volumes made further segmentation difficult but that the firm had identified this as an improvement area.

The FCA's point is that aggregated MI can obscure whether different groups of customers with characteristics of vulnerability experience different barriers or outcomes. Firms with low volumes are not expected to produce statistically robust segmentation, but they should be able to show that they have considered whether different groups receive appropriate support.

Governance that operates, rather than governance that exists

The FCA acknowledges that many firms have invested in committees, reporting lines and escalation routes. Its criticism is that it is often unclear how those arrangements work day to day: firms describe what exists rather than how they use it. Boards receive regular updates and are described as central to oversight, but in many cases the FCA saw them reviewing and approving reports rather than challenging them or pushing for further action.

Culture attracted a similar observation. Training and internal communication about the Duty were common, but the FCA often found no evidence of how culture affected decisions, how people were held accountable, or how the firm checked whether its approach made a difference. In smaller firms, culture was frequently reinforced informally, through team discussions and personal judgement, with limited evidence that learning had been embedded into day-to-day behaviours, supervision, objectives or incentives.

Good practice included central action trackers recording actions from risk events, product governance, committee discussions, MI and file reviews in one place, with named owners, target dates and status updates, overseen through the Consumer Duty Champion, senior management and board reporting. For smaller firms, the FCA accepts less formal arrangements, provided responsibility sits with an appropriate senior individual and there are straightforward records such as a log of issues, agreed actions and deadlines.

Outsourcing and distribution chain arrangements

The FCA restates that firms using third parties to deliver part of their services remain responsible for their customers' outcomes. It saw positive examples of firms using MI, regular reviews, escalation routes and checks over outsourced providers, and of firms drawing on information from distributors and other partners to identify outcome issues within their own area of responsibility. Where problems were linked to an external partner, better firms engaged with them and followed up, including asking for changes to communications that could mislead or confuse customers.

The FCA expects this to be proportionate and risk-based, focused on the areas with the greatest impact on customer outcomes. Its criticism is that firms often refer to regular engagement with third parties without being able to show how they track relevant outcomes across those relationships or how that engagement leads to action.

Key Themes from the Review

Four themes run through the publication and are worth carrying into any internal discussion of it:

1. Definition drives everything. If a firm has not defined what a good outcome looks like at each stage of its customer journeys, no amount of MI will tell it whether customers are getting one.

2. Evidence must be continuous. The FCA is looking for an unbroken trail from issue identified, to cause understood, to action taken, to improvement tested.

3. Proportionality is genuine, but it is not the same as informality. A focused set of indicators is acceptable. Undocumented judgement is not.

4. Responsibility does not stop at the firm's own perimeter. Outcomes arising in the distribution chain or from outsourced activity remain the firm's concern.

   
   

What Should Firms Do Now

There is no deadline attached to this publication, so the sensible response is a proportionate review rather than a programme of work. For most firms the natural point to do this is alongside the annual board assessment of whether the firm is delivering good outcomes for retail customers.

A practical starting point is to take one product or customer journey and test whether the firm could evidence the whole chain for a single issue identified in the past twelve months. That exercise usually reveals where the gaps sit more quickly than a framework-wide review.

Beyond that, firms should consider the following:

• Check whether good and poor outcomes are defined at the level of individual products and journey stages, not only as a single overarching statement.

• Review each threshold and tolerance in use and record the rationale for it, replacing any that cannot be justified as an indicator of potential harm.

• Identify which current metrics are operational activity measures rather than outcome measures, and decide whether they need to be supplemented.

• Test whether MI packs, minutes and action logs together show the decision trail: what was considered, who challenged it, what was decided, who owned it, and what happened next.

• Select two or three remedies implemented in the past year and check whether the firm tested that they worked, rather than recording only that they were completed.

• Review whether outcomes for customers in vulnerable circumstances are considered by driver as well as in aggregate, and document the position where volumes are too low to segment.

• Confirm that oversight of outsourced providers and distribution chain partners produces information the firm actually uses, with a route to escalate and follow up.

• Check that board and committee papers invite challenge on outcomes rather than presenting them for approval, and that any challenge is minuted.

  
  

Smaller firms should read the publication's smaller-firm passages before deciding on scope. The FCA has been explicit that a focused set of indicators, a log of issues and actions, and clear ownership by a named senior individual can be sufficient. The risk for a small firm is not usually a lack of systems; it is that good, informal oversight leaves no record capable of demonstrating what happened.

Frequently Asked Questions About Consumer Duty Outcomes Monitoring

Has the FCA introduced new outcomes monitoring rules?

No. The publication of 27 July 2026 is categorised as good and poor practice. It sets out examples and supervisory expectations, and creates no new rules, deadlines or transitional arrangements. The underlying obligations remain those in PRIN 2A, supported by FG22/5.

What is the difference between monitoring activity and monitoring outcomes?

Activity monitoring measures what the firm did, such as reviews completed or conversion rates. Outcomes monitoring asks whether the customer ended up in a good position at each stage of the journey. The FCA has said that data, metrics and MI will not by themselves show that customers are receiving good outcomes.

Does the FCA expect smaller firms to monitor outcomes in the same way as large firms?

No. The FCA expects all firms to deliver good outcomes but says monitoring should reflect the size, complexity and risk of the business. Its smaller-firm examples involve a focused set of existing indicators such as complaints, feedback, missed service standards and file checks, without complex systems or large teams.

What evidence does the FCA expect to see from a firm?

The FCA looks for a firm to explain what its information tells it, how it uses that information to identify risks or issues, what action it took, and how it considered whether the action improved outcomes. In practice that means a traceable record from MI, through governance challenge and decision, to a named owner and a follow-up test.

Is a firm responsible for outcomes delivered through third parties?

Yes. The FCA restates that firms using third parties to deliver part of their services remain responsible for their customers' outcomes, including in distribution chain arrangements. Monitoring should be proportionate and focused on the areas with the greatest impact on customers.

How Compliance Angle Can Help

Compliance Angle works with FCA-regulated firms and firms seeking authorisation on exactly the questions this review raises. Support is scaled to the firm's business model, permissions, size and regulatory risk, and the starting point is usually a short diagnostic rather than a framework rebuild.

Relevant services include:

• Consumer Duty support, including defining good and poor outcomes at product and journey level, outcomes and MI design, and the annual board assessment.

• FCA compliance frameworks and policies, covering compliance monitoring programmes and Consumer Duty related risk and outcomes assessments, so that testing is aligned to where customer harm is most likely.

• Compliance and regulatory health checks, benchmarking current arrangements against the FCA's published good practice and identifying proportionate remedial actions.

• FCA risk management and governance, covering board and committee structures, information flows, and escalation and challenge processes.

• SM&CR support, where responsibility for outcomes monitoring needs to be allocated clearly to a senior individual and evidenced.

• FCA authorisation and application support, for applicant firms that need to show how they will monitor customer outcomes from day one.

• Ongoing compliance support, for firms without in-house compliance resource.

• Compliance training, including Consumer Duty and vulnerable customers, where the review identifies a gap between training delivered and behaviour evidenced.

  
  

If you would like a proportionate review of your outcomes monitoring arrangements against this publication, contact us at info@complianceangle.co.uk.

Source: Financial Conduct Authority, Outcomes monitoring: good practice and areas for improvement, published 27 July 2026.