FCA Consumer Duty Focus Areas: Key Priorities for Firms

On 9 December 2024, the FCA published its latest focus areas under the Consumer Duty, highlighting key areas where firms need to improve and align with regulatory expectations. This update is crucial for businesses across the financial and insurance sectors, as the FCA aims to drive better consumer outcomes.

The FCA has prioritised areas where they:

• Believe sharing more information on good and bad practices will help firms improve and achieve better outcomes.
• Have identified areas at risk of harm or potential harm to consumers.
• Require further information to understand how the Consumer Duty is being embedded into firms’ operations.

Key Focus Areas:

1. Embedding the Consumer Duty and Raising Standards

The FCA will release three reports in Q4 2024 and Q1 2025, covering the following areas:

• Board/Governing Body Reports & Complaints Root Cause Analysis: Examining how firms are responding to outcomes monitoring, identifying areas of improvement, and addressing systemic issues.
• Treatment of Customers in Vulnerable Circumstances: Reviewing how firms are supporting vulnerable customers throughout their journey to ensure informed decision-making.
• Consumer Support Outcome & Supporting Informed Decision-Making: Analyzing how firms support consumers and use communication strategies to aid informed decision-making.

2. Enhancing Understanding of the Price and Value Outcome

The FCA acknowledges that firms face challenges in conducting fair value assessments. They refer to their publication from Q3 2024 for additional guidance. In H1 2025, the FCA will also conduct a Market Study into Pure Protection Insurance, focusing on consumer engagement and understanding of these products, as well as assessing the competitive pressures and firms’ practices.

3. Sector-Specific Priorities
Along with the Pure Protection Market Study, the FCA will examine claims handling arrangements in the insurance sector. They aim to understand whether systems, controls, governance, and oversight structures promote good consumer outcomes. The findings will be published in Q2 2025. For firms offering Premium Finance, the FCA will review whether digital journeys and tools help customers understand credit agreements. Findings will be published in H1 2025.

4. Realising the Benefits of the Consumer Duty
The FCA is seeking feedback on how they can simplify requirements for retail firms and ensure the Consumer Duty delivers broader benefits. They will publish next steps in H1 2025.

What Firms Need to Do:

As the FCA continues to publish more information on their expectations, firms should carefully review this latest update and assess their current practices. The more the FCA releases, the fewer excuses firms will have for not meeting these requirements.

How We Can Help:

If you need assistance in navigating this latest publication or any of the previous ones, we can work with your firm to ensure you meet regulatory standards and achieve best practices.

Additionally, through our partner company Ever Comply, we offer solutions that can help firms comply with various elements of the Consumer Duty. If you’d like to learn more or see a demo of the system, get in touch.