The UK’s Financial Conduct Authority (FCA) on Friday flagged inconsistent practice in a UK-wide review of firms’ Consumer Duty product design and monitoring, including oversight of third-party distribution.
The regulator pointed to findings from a blog that was first published on Tuesday by Charlotte Clark, the FCA director responsible for cross-cutting policy and strategy. Firms need to demonstrate a clear line from customer research, through governance challenge, to remedial action.
Broad target markets remain a concern
Stronger firms researched customer needs and behaviour, then used the findings to define granular target markets. They also embedded product governance and clear ownership in routine business decisions.
Other firms continued to use broad target markets, making it harder to assess whether products met the needs of different customer groups.
The FCA found that firms were collecting complaints, customer feedback, usage patterns and early cancellation data. However, some could not demonstrate how findings were escalated, challenged or converted into product and service changes.
Distribution oversight was also uneven. Better-performing firms set expectations for distributors, shared relevant information, and tested whether third parties sold and serviced products as intended.
The FCA highlighted a bank that reduced ATM withdrawal complaints by 45% in three months after clarifying app information and improving staff training. An appliance insurer supplied temporary mini fridges to customers whose medication required refrigeration.
The review introduces no new rules or enforcement action. It forms part of the FCA’s 2025/26 Consumer Duty programme, covering fair value, consumer understanding, board reporting and outcomes monitoring.
