The FCA’s Consumer understanding: good practice and areas for improvement publication is not simply guidance on better communications – it’s a clear statement about capability, governance and behavioural maturity under the Consumer Duty.
While the FCA continues to allow flexibility in how outcomes are achieved, firms must now be able to demonstrate how their people, processes and decision‑making genuinely support consumer understanding across the organisation.
What the FCA expects beyond policy compliance
The FCA highlights good practice where consumer understanding is treated as a joined‑up organisational responsibility, spanning front‑line teams, product design, compliance, marketing and senior management.
This includes:
- shared use of MI to identify where customers struggle
- proportionate testing embedded into business‑as‑usual activity
- clear ownership and accountability for outcomes
- practical action taken when insight reveals risk or confusion
- governance forums that challenge, prioritise and track change
In contrast, weaker practice was often characterised by siloed ownership, superficial testing or over‑reliance on static policies rather than lived behaviours.
Why this is a people and capability issue
From an advisory perspective, the FCA’s findings expose a consistent challenge: many firms have implemented Consumer Duty frameworks faster than they have built the capability to operate them effectively.
Common gaps include:
- front‑line staff unsure how to identify or escalate consumer understanding risks
- managers lacking confidence in interpreting MI or testing outcomes
- senior leaders unable to clearly articulate how Consumer Duty outcomes are governed day‑to‑day
- inconsistent understanding of vulnerability across teams and functions
Without sustained behavioural change, even well‑designed frameworks struggle to deliver outcomes in practice.
What firms should do next
To close the gap between framework and delivery, firms should focus on:
- Clarifying ownership – ensuring consumer understanding is clearly owned, challenged and discussed at the right levels.
- Building practical capability, so teams understand what good looks like in their role, not just in policy.
- Embedding learning loops, linking insight, action and improvement into everyday decision‑making.
- Strengthening governance behaviours, not just governance documentation.
These steps are essential if firms are to move from technical compliance to sustainable Consumer Duty delivery.
How Momenta can help
Momenta supports firms to deliver lasting regulatory change through people and capability. We work with firms to:
- strengthen Consumer Duty leadership and accountability
- build practical skills across compliance, risk and front‑line teams
- embed consumer understanding into culture and behaviours
- support governance effectiveness, not just governance design
Our focus is helping firms make Consumer Duty work in practice – consistently, credibly and sustainably.
If your organisation has the Consumer Duty framework in place but needs confidence in delivery, speak to Momenta about building the capability and governance required to demonstrate strong consumer understanding outcomes.
