Two businessmen review information on an tablet.
The Consumer Duty[2] was designed to ensure firms were focussed on the outcomes that matter to their customers. Understanding the actual experiences of people and identifying potential harm are essential to delivering these improvements. So outcomes monitoring is at the heart of helping consumers to better navigate their financial lives.
Understanding these outcomes is about more than collecting data or producing reports. It helps firms identify where customers may be struggling, spot emerging risks and take action before harm occurs. Doing this well helps build consumer trust in the firms and products that they engage with.
This is why, over the past year, we’ve looked closely at how firms are approaching outcomes monitoring[3].
Monitoring customer outcomes: what good practice looks like
Our review found that the strongest approaches were structured, evidence-based and focused on using information to identify risks.
Firms that were most effective did not simply collect management information; they used it to understand what was happening across the customer journey, challenge performance and drive improvements for consumers. They understood that every part of the customer journey gives an important signal.
But some firms need to do more to make monitoring proactive and outcomes-focused, demonstrate how information drives action and test whether interventions are effective.
Building frameworks that drive better outcomes
The strongest firms had clear monitoring frameworks that defined what good outcomes looked like in practice and linked those to different stages of the customer journey.
Rather than relying on broad statements or high-level metrics, they translated customer outcomes into measurable indicators and regularly reviewed whether they worked. Importantly, these firms could demonstrate a clear link between the information they collected, the decisions they made and the actions they took.
We saw proportionate examples from smaller firms. Some identified a small number of key points where customers were more likely to experience harm, using existing indicators to assess whether customers were receiving good outcomes. This shows that firms do not need complex systems or large teams to monitor outcomes effectively, provided their approach is clear, risk-based and linked to action.
But some firms’ monitoring frameworks were not sufficiently focused on customer outcomes or the risks of harm. They relied on high-level monitoring without a clear structure for identifying poor outcomes, understanding their causes or taking appropriate action.
Using data to strengthen monitoring and support
The firms with stronger approaches produced clear evidence that analysis helped to improve customer outcomes. They used data and management information to identify risks, make decisions and test whether interventions were improving outcomes. Some used indicators and thresholds to identify foreseeable harm, including customer vulnerability, unsuitable applications or financial risk.
But there are still areas for improvement in how firms use and evidence management information.
Some firms relied on reactive or poorly defined indicators, lacked clear audit trails, and could not demonstrate how data was used to identify emerging risks or assess customer outcomes. Firms should be able to show a clear link between management information, decision-making and improvements in outcomes. This includes explaining why metrics and tolerances were chosen and whether actions have been tested and are effective in reducing customer harm or friction.
Strengthen approach to third parties and distribution chains
Customers experience a product or service as a whole. They are unlikely to distinguish between the firms involved in delivering it.
That's why effective arrangements with third parties and distribution partners remain important. Firms should understand the outcomes customers are experiencing, and get relevant information from third parties and distribution partners where needed.
We've seen positive examples of firms using management information, regular reviews and targeted engagement with partners to identify and address issues. This aligns with the FCA’s recent proposals on information sharing across distribution chains
Make governance count
We've seen stronger board and senior management engagement compared with earlier reviews.
Many firms now have clearer accountability, better action tracking and stronger governance arrangements.
However, effective governance is about more than reviewing reports.
We still want to see clearer evidence of challenge, discussion and decision-making. Boards and senior leaders should be able to demonstrate how they have scrutinised outcomes, challenged assumptions and driven improvements where needed.
Focus on outcomes, not activity
One theme runs through the strongest examples we reviewed.
They don't just show what they monitored. They show what happened as a result.
They can identify an issue, understand its cause, take action and then assess whether that action improved outcomes for customers.
As firms continue embedding the Duty, they should consider whether their monitoring gives them a clear enough view of customer outcomes and whether it leads to timely, effective action.
The firms making the strongest progress aren't necessarily collecting more information. They're using it more effectively to understand their customers, identify harm earlier and drive meaningful improvements.
And that's what outcomes monitoring under the Duty is intended to achieve.