Decoding the FCA’s Consumer Duty Requirements

Roger Miles

25 years: Behavoural science & conduct

In this video, Roger introduces the UK Financial Conduct Authority’s (FCA) Consumer Duty requirements and explains how they build on the earlier Treating Customers Fairly (TCF) principles. He also outlines how conduct regulation has evolved, what the FCA now expects from regulated firms, and how behavioural science shapes today’s rules.

Conduct

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Decoding the FCA’s Consumer Duty Requirements

10 mins 24 secs

Key learning objectives:

Understand how the FCA’s Consumer Duty builds upon the principles of Treating Customers Fairly (TCF)
Identify the five key areas firms must address to meet Consumer Duty standards
Outline how behavioural science influences the FCA’s approach to conduct regulation
Identify practical ways to demonstrate good conduct and customer-centric behaviour in everyday work

Overview:

The Financial Conduct Authority’s (FCA) Consumer Duty sets higher standards for how financial firms treat retail customers. Building on Treating Customers Fairly (TCF), it focuses on fair value, suitable products, clear communication, and good service especially for vulnerable customers. Firms must also show they’re delivering good outcomes through strong governance and monitoring. The FCA now includes non-financial misconduct, such as bullying and greenwashing, as part of its expectations, emphasising a culture of responsibility and ethical behaviour across all levels of a firm.

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Summary

What is the background to Consumer Duty and why was it introduced?

The Consumer Duty was introduced in response to long-standing problems with how some financial products were sold. One of the clearest examples of this was the Payment Protection Insurance (PPI) scandal. For over a decade, British banks aggressively sold PPI alongside loans, mortgages and credit cards even to people who didn’t want or need it. In many cases, consumers weren’t told PPI had been added to their loan, or they were pressured into accepting it.

How does Consumer Duty build on Treating Customers Fairly (TCF)?

Consumer Duty builds on the older TCF framework by turning broad principles into more specific, measurable standards. TCF aimed to encourage firms to pay attention to what customers really need. It introduced six key outcomes that focused on fair treatment, clear information, suitable advice, and easy access to complaints or switching services.

What are the five key areas firms must focus on under Consumer Duty?

Firms must be ready to demonstrate customer-centred processes in five core areas:

Fair price and value
Product and service suitability
Customer service
Clear communications
Governance and monitoring

What does misconduct mean under the new Consumer Duty rules?

The definition of misconduct has expanded beyond financial dishonesty. Traditionally, misconduct referred to actions like hiding key information, exploiting vulnerable customers, or insider abuse. But the FCA now includes non-financial misconduct in its expectations, which covers:

Bullying, exclusion and harassment in the workplace
Giving misleading or dishonest answers to the regulator
Greenwashing, or exaggerating ESG credentials
Acting with disregard for customer outcomes

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Roger Miles

Roger researches behavioural risks in organisations, and advises senior leaders on how best to communicate risk and conduct matters. Previously, Roger ran risk communication programmes for professional bodies and the British Government. He now runs industry-level Academies for Conduct and Culture, and produces workshops with financial firms.

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