The Consumer Duty is one of the most significant changes to the Financial Conduct Authority’s regulatory approach in recent years. It has been in force for open products and services since 31 July 2023, and for closed products and services since 31 July 2024.
As part of meeting its secondary objective to facilitate international competitiveness and growth, the FCA is now reviewing its wider rules to see how its can use the Consumer Duty to simplify its requirements. Reducing the complexity of our rulebook could lower costs, encourage innovation, and help support the risk appetite needed to support growth, ultimately boosting international competitiveness and the economy over the long-term.
Priority areas for 2024/25
The FCA has set out its priorities under the Consumer Duty for the remainder of 2024/25 here. It has prioritised initiatives where:
- The FCA believes sharing more information on good and poor practice and its expectations will benefit industry and help drive better outcomes.
- The FCA sees the greatest need to act to address harm – or potential for harm – due to the size or urgency of that harm.
- The FCA requires more data to improve its understanding of the way the Consumer Duty is being embedded.
Based on this prioritisation, it has four focus areas for the rest of 2024/25.
- Embedding the Consumer Duty and raising standards (Assessing across sectors how firms are implementing and complying with the Consumer Duty)
- Enhancing understanding of the price and value outcome (including platform case, pure protection insurance, and premium finance)
- Sector-specific priorities (retail banking, consumer finance, payments and digital assets, consumer investments, general and life insurance and sustainable finance)
- Realising the benefits of the Consumer Duty (next steps from the call for input on wider requirements for retail firms to be set out in H1 2025)