Consumer Duty – FCA’s update on implementation plans

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Outcomes from the FCA’s review

Demonstrating their increasingly proactive approach, the FCA has conducted a multi-firm review of Consumer Duty implementation plans for larger firms believed to be substantially in scope of the Duty. As well as engaging with these firms directly, the FCA has published findings from their review to help all firms understand their expectations.

The full review can be found here.

Considerations for firms:

The FCA have identified good practices demonstrate by the larger firms and instances of well-constructed and thought through implementation plans. However, the FCA has also highlighted areas for improvement both within the specifics of firms implementation plans and across implementation projects and oversight governance more generally.

We have reviewed the key findings in detail and have summarised where we believe efforts are best invested to ensure implementation plans meet FCA expectations and support the effective and timely implementation of Consumer Duty within firms.

Key finding

Considerations for firms

Governance and oversight

Are there clear and defined responsibilities for the implementation programme? Who is leading the overall programme or specific workstreams?

Have you defined the progress updates to the oversight body?

Have you appointed a sufficiently senior and knowledgeable board champion? How effectively are they demonstrating their responsibilities through the implementation phase?

Have you sought assurance or insight from risk and compliance or internal audit functions on the risks impacting the implementation programme?

Have you considered any changes to assurance that may be needed post implementation?

Culture and people

Have you considered how you will embed the Duty into the firm’s culture?

Have you considered how you could embed the Duty in your strategy, governance structure and decision making?

Have you considered if changes are needed to reward and incentive schemes to better reflect the Duty?

Have you reviewed and considered any training needs and how is this captured within your implementation programme?


How fully developed is your implementation plan?

Have you clearly assessed products for the potential of poor consumer outcomes?

Does you implementation plan clearly articulate the prioritisation of work?

Are you clear on what you can and can’t delivery by July 2023?

Have you considered the resources needed and any limitations or risks to delivering your implementation plan and any contingency arrangements?

Third parties

Have you identified key third parties and the nature of dependency?

Have you initiated engagement with third parties?

Have you defined a structured engagement through the implementation period?

Have you defined the data requirements and relationships needed to provided assurance on third party activities?

The four outcomes

Does your implementation plan provide clear tasks and activities across your review and assessment of products?

Do you maintain clear and consistent understanding on what ‘fair value’ means for your products/consumers?

Have you considered the challenges in applying the Duty to existing products?

Are you clear on what additional work is required to embed the Duty, over and above the work completed through past improvements?

Have you documented and applied a consistent methodology or approach in reviewing products, services, communication and customer journeys against the Duty?

Is there clarity on the amendments and uplifts to existing assessment frameworks to meet the Duty standard?

Data strategies

Have you clearly defined the data requirements needed to monitor compliance with the Duty?

Have you considered gaps in existing data, or how these will deliver the outcomes intended?

Have you identified new data sources to meet the Duty, and how will these be captured, maintained and considered?

Have you considered how you will monitor outcomes across different groups of customers, including vulnerable customers?

Our view

Whilst many in the insurance sector may be confident in their existing value metrics and good consumer outcomes, the FCA is raising the bar in terms of effective governance, oversight and evidencing of these considerations. The FCA’s early engagement further demonstrates their commitment to proactive and data driven regulation, and firms of all sizes need to be ready. We are likely to see greater scrutiny of responsibility, processes, controls and data aligned to the implementation and monitoring of the Duty.

Please contact PKF’s GRC team for help assessing and reviewing your current implementation plans and approaches.

How we can help

PKF’s Governance, Risk & Control Assurance team can help to provide assurance as to whether your governance, oversight and controls are designed to meet the FCA requirements.

  • We have experience of reviewing implementation frameworks, programmes and projects across a wide range of subject matters.
  • We can provide assurance that your implementation plans are complete, well thought through and that they prioritise the highest risk products and services.
  • We also review the structure, responsibilities and timelines identified for delivery, and whether your projects are tracking against time, budget and intended outcomes.
  • We can review your governance and oversight frameworks and structures to provide assurance that you’ve taken effective actions to promote and embed the Consumer Duty into your existing SM&CR arrangements.
  • We’ll also assess the impact and effectiveness of changes made to everyday formal and informal application of the Consumer Duty throughout your firm’s operations.
  • And we’ll consider the effectiveness of consumer-focused behaviours and activities.
  • We can assess the work completed and controls you’ve established, across each of the FCA’s four outcomes. We’ll provide assurance in one of two ways:

1) through specific, outcome-focused reviews considering each of the outcomes separately and tracking them across the consumer journey, or

2) through reviews that consider the delivery and evidencing of the outcomes across specific lines of business.

For more information, please contact Richard Willshire.