Comment: Consumer Duty – what comes next? – Mortgage Strategy
Three years on from the introduction of the Consumer Duty, the conversation is starting to change.
Firms have understandably focused on implementation: reviewing processes, assessing fair value, strengthening governance and building management information (MI) to demonstrate that the duty has been embedded. The question now is whether it is delivering better customer outcomes.
There has been progress. The Consumer Duty has pushed customer outcomes higher up the agenda, increased scrutiny of fair value and encouraged firms to think more systematically about vulnerability and consumer understanding.
The next phase of the Consumer Duty should be about making it useful
The Association of Mortgage Intermediaries (Ami) has consistently supported an outcomes-based approach and proportionate regulation, particularly where it gives firms room to exercise professional judgement. But firms also need sufficient clarity about what good outcomes and proportionate evidence look like in practice.
The emphasis now needs to shift towards impact, focusing on understanding what the information that firms collect actually tells them about their customers.
This is particularly relevant to MI, where more data does not automatically result in better outcomes. The Financial Conduct Authority has emphasised that firms should be able to explain what their data shows, what risks it identifies, what action they took in response and whether that action improved customer outcomes.
Providing information does not necessarily mean that somebody has understood it
There is a business opportunity here too. MI can reveal unmet customer needs, highlighting opportunities for additional support or new business lines.
Practical questions
That raises practical questions about what firms should measure and how much evidence is enough. There is a risk that an outcomes-based framework creates an ever-growing compliance exercise if firms feel they need to produce more reports and document more decisions.
For smaller firms in particular, a sense of proportion is crucial. A small, directly authorised advice firm does not have the same resources, customer volumes or governance structures as a large lender or network, and its Consumer Duty framework should not be expected to look the same.
The question now is whether the duty is delivering better customer outcomes
Encouragingly, the FCA recognises this. Its recent work on outcomes monitoring acknowledges that smaller firms can use proportionate, risk-based frameworks, provided they remain focused on customer outcomes and are appropriate to their business model, customer base and risk profile.
The emphasis should therefore be on meaningful evidence rather than volume. Can a firm identify where customers might experience poor outcomes? Does it know when customers are struggling to understand something or dropping out of a journey? Can it recognise patterns and show that it has acted when something is not working as it should?
Consumer understanding
Consumer understanding is another area where the distinction between process and outcome is significant. Providing information does not necessarily mean that somebody has understood it.
That becomes even more relevant as journeys evolve. People are already moving between advised, execution-only and digital routes, and AI is likely to play a greater role in how they research their options and interact with firms. The channel may change but the principles underpinning the Consumer Duty cannot. Understanding, foreseeable harm and appropriate support still need to be addressed.
There is a risk that an outcomes-based framework creates an ever-growing compliance exercise
Digital and AI-supported journeys may make those principles more significant. Someone progressing independently through a digital process may have fewer opportunities for another person to identify that they have misunderstood something or need additional support. Firms must think carefully about how they identify those risks without creating unnecessary friction.
This is also why regulatory simplification needs careful handling. Removing unnecessary duplication is welcome but simplification works only if firms have enough clarity to exercise judgement confidently. Where decisions are complex or have long-term consequences, firms still need to understand what ‘good’ looks like in practice.
The next phase of the Consumer Duty should be about making it useful: understanding what good outcomes look like, identifying where customers experience problems and acting on what the evidence tells us.
Stephanie Charman is chief executive of the Association of Mortgage Intermediaries
This article featured in the November 2026 edition of Mortgage Strategy.
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