Consumer Duty - one year in

By Mike Rogers, Iridium's Regulation and Compliance practice lead

"The FCA's implementation of Consumer Duty aimed to enhance the UK’s financial services sector and ensure greater protection and fairness for consumers.

Has the duty achieved what it set out to do?

"The shift to mandating a higher standard of care, compelling firms to prioritise customer outcomes and act in their best interests has, for most firms, led to improved product and service design, better suited to consumer needs and reduced the risk of mis-selling.

The increased transparency and accountability that the regulation has brought is a step in the journey to fostering greater consumer trust and confidence in financial services, however, these are still early days and it is yet to be seen how visible this is to consumers.

The approach to supervision and enforcement by the Financial Conduct Authority has ensured that firms have implemented frameworks, which now need to be maintained to ensure ongoing compliance. The rollout of Consumer Duty has been positive in benefiting the entire financial ecosystem by creating greater trust between consumers and financial organisations.

Has It Been Easily Embraced or a Bumpy Ride?

"The adoption of Consumer Duty has been a varied experience for the UK financial sector. Many firms that already prioritised consumer welfare found the transition relatively smooth, others faced substantial logistical and financial hurdles.

Some smaller firms, in particular, may have struggled with the perceived regulatory burden and the cost of compliance, however, the overall trend has been towards acceptance, driven by the long-term benefits of improved consumer trust and market integrity. The implementation has highlighted the importance for firms of regulatory adaptability in addressing industry challenges.

What's next for Consumer Duty

"It is now expected that the FCA's focus will shift to adapting Consumer Duty regulations to the evolving digital landscape and emerging financial technologies. Ensuring that digital financial products meet the high standards of consumer protection and address the concerning issues of digital fraud and data privacy.

The FCA is also likely to emphasise continuous improvement through feedback mechanisms that engage stakeholders to refine firms’ regulatory frameworks. Protecting vulnerable consumers will remain a priority with the FCA seeking to align the Consumer Duty with international standards, collaborating with global regulatory bodies to address cross-border financial services and protect UK consumers in an interconnected market."

Connect with Mike Rogers .

?