The current phase of Consumer Duty is not about proving implementation happened; it is about proving it works.
In March 2026, the FCA published its review of firms’ approaches to this outcome, examining management information, communication testing, vulnerability and accessibility, financial promotions, and governance. Its message was clear: firms must help customers make effective, timely and properly informed decisions, and prove their approach works.1
For risk, compliance, product, marketing and senior management teams, this raises a difficult question: can you prove what your customers understand?
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Consumer understanding is an evidence issue
Consumer understanding is often treated as a communications problem. Are the words clear? Is the document shorter? Is the layout easier to read? Has compliance approved the promotion?
Those questions are important, but they aren’t enough. A communication can be accurate and still confuse. A disclosure can be complete and still arrive too late. A product page can include the required information and still fail to make key risks visible. A low complaint rate may suggest customers are satisfied, but it does not prove they understood the product, costs, exclusions or consequences.
The FCA’s review identified weak testing, unclear use of management information, insufficient testing with different customer groups and limited follow-up after changes. That makes consumer understanding an evidence issue.
Firms need to show what they tested, what they learned, what they changed and whether those changes improved outcomes. This is not a one-off communications exercise. It is part of embedding Consumer Duty into governance, monitoring and continuous improvement.
Testing must prove understanding
One of the FCA’s clearest concerns was weak evidence of testing.
Some firms said they had tested communications but had little proof. Others relied on testing that was superficial, one-off or poorly documented. The FCA also found cases where firms changed communications without checking whether those changes improved customer understanding.
Testing is where intention meets evidence. A firm may believe a communication is clear, but unless it tests that communication with relevant customers, monitors outcomes or reviews real customer interactions, it is relying on assumptions.
Records should show what changed, why it changed and what impact it had. Without that trail, firms may struggle to prove improvements were more than cosmetic.
Testing does not need to be complex. The FCA points to proportionate methods such as short surveys, comprehension checks, callbacks, A/B testing and feedback during digital trials.
The important point is the feedback loop. Firms should be able to identify the consumer understanding risk, test the communication or journey, record the outcome, assign actions and check whether the change worked.
MI needs to drive action
Many firms collect large volumes of management information (complaints, call logs. chat transcripts, etc, etc). But MI is not automatically insight and insight is not automatically action.
The FCA found that some firms collected MI but could not explain how it informed their assessment of consumer understanding. It also warned that reliance on sales data or the absence of complaints does not provide reliable assurance.
This is a core maturity point. Why is the metric relevant? What customer outcome does it indicate? Who reviews it? What happens when it deteriorates? How are issues escalated? How are actions tracked? How does the board know whether the problem has been resolved?
MI should help firms identify where customers may not understand key information. It should support product reviews, communication redesign, control testing, remediation and board reporting – and lead to decisions.
Vulnerable customers need clearer evidence
A communication that works for one group may not work for another. A digital journey that seems simple to a confident online user may create barriers for someone with lower digital capability. A standard document may not support customers with accessibility needs, language requirements or lower financial capability.
The FCA identified insufficient testing with different customer groups as an area for improvement. Firms need to understand the target market for each product or service. If that audience includes customers with lower financial capability, accessibility needs or language requirements, communications should be designed and tested accordingly.
The FCA and ICO’s March 2026 joint statement on vulnerability-related data adds another dimension. It aims to help firms deliver good outcomes for consumers in vulnerable circumstances while using personal information lawfully, fairly and responsibly.2
Without a clear view of the journey, firms may struggle to identify where misunderstanding occurs. Without links between communications, products, controls, obligations, issues and actions, they may struggle to evidence that risks are being managed.
Financial promotions are part of the same outcome
Promotions often shape a customer’s first impression. If they overemphasise benefits, hide limitations, use unclear language or create misleading expectations, customers may begin the journey with poor understanding.
The FCA’s review identified several areas for improvement, including limited consumer testing, weak monitoring of promotional outcomes, overemphasis on benefits, and unclear or unbalanced messaging.
Firms should consider whether customers understand the main message, key risks, eligibility criteria, costs, limitations and next steps. They should also monitor what happens after launch. Are customers asking the same questions? Are complaints or contact centre themes pointing to confusion? Are customers dropping out at predictable points? Are vulnerable or lower-capability customers experiencing different outcomes?
Consumer understanding spans marketing, compliance, product, risk and customer service. It needs shared ownership, not siloed approval.
Governance needs a feedback loop
The FCA’s April 2026 update on Year 2 Consumer Duty board reports reinforces the same evidence-led direction.3
The FCA says that good board reports provide clear evidence about outcomes, helping boards ask better questions, hold people to account and act quickly. Firms need to do more to link data to customer outcomes, evidence meaningful board challenge and deepen assessment of consumer understanding and support.
Consumer understanding cannot sit only with the teams creating communications. Boards and senior leaders need to know whether customers are receiving the information and support they need. They need to see where risks are emerging, whether actions are being completed and whether the evidence is strong enough.
That requires reporting that goes beyond activity. It is not enough to say communications were reviewed, training was delivered or dashboards were updated. Board reports should show whether customer outcomes are improving and where further action is needed.
GRC software can help by connecting management information, actions, assurance, risks, controls, obligations, issues and attestations into a clearer governance view.
Can you prove what customers understand?
Consumer understanding under Consumer Duty is about helping customers make informed decisions, then proving how the firm knows its approach is working.
The FCA’s updated Consumer Duty focus areas show that firms should expect continued scrutiny of outcomes, governance and evidence. The regulator is relying on the Duty as a flexible framework and pushing firms to show how they monitor and improve customer outcomes.4
The firms best placed for the next phase of Consumer Duty will be those that can answer one question with confidence: can you prove what your customers understand?
Protecht helps firms bring structure, visibility and accountability to Consumer Duty compliance. It supports customer journey visualisation, product governance, metrics monitoring, testing and assurance, action management, compliance monitoring, analytics, and board and senior management reporting.
Join a session with one of our specialists to find out more about Protecht can support your Consumer Duty programme:
Citations:
1. Financial Conduct Authority, Consumer understanding: good practice and areas for improvement, 13 March 2026: https://www.fca.org.uk/publications/good-and-poor-practice/consumer-understanding-good-practice-areas-improvement
2. Financial Conduct Authority and Information Commissioner’s Office, Joint FCA and ICO statement on regulatory expectations regarding firms’ use of vulnerability-related data, 27 March 2026: https://www.fca.org.uk/publications/corporate-documents/joint-fca-and-ico-statement-regulatory-expectations-regarding-firms
3. Financial Conduct Authority, Year 2 Consumer Duty Board Reports: progress and what comes next, 16 April 2026: https://www.fca.org.uk/news/blogs/year-2-consumer-duty-board-reports-progress-and-what-comes-next
4. Financial Conduct Authority, Consumer Duty: focus areas, 7 May 2026: https://www.fca.org.uk/publications/corporate-documents/consumer-duty-focus-areas