How to improve Consumer Duty board reporting

The importance of effective board reports

Board reports are a key part of Consumer Duty implementation, showcasing how a company’s products and services impact consumer outcomes.

The FCA’s review examined how companies are approaching this responsibility, shedding light on best practices while identifying common shortcomings.

Good practices

The FCA highlight several examples of good practices for Consumer Duty reporting. These include:

1. Clear outcomes focus

Companies that produced effective reports dedicated specific sections to the four Consumer Duty outcomes, and defined ‘what good looks like’ for their customers.

2. Good quality data

Good reports included robust Management Information (MI) to substantiate conclusions about customer outcomes.

3. Analysis of different customer types

The FCA praised companies that assessed how their services impacted different customer types, such as vulnerable customer groups.

4. Clear processes for production of the report

Companies with structured processes for preparing and reviewing board reports in a timely manner demonstrated better oversight.

5. A focus on culture

The FCA praised companies with a customer-centric culture to deliver good outcomes.

Areas for improvement

Despite these successes, the FCA identified several shortcomings in how some companies approach their board reporting:

1. Better data quality

Some reports were too generic, lacking sufficient data to justify conclusions or evidence good customer outcomes

2. Comprehensive view across distribution chains

A lack of robust evidence undermined the credibility of some reports.

3. Analysis of different customer types

Some companies failed to adequately address how their products and services impact different customer groups, including vulnerable customers.

4. Challenge from the board

It wasn’t always clear that companies’ governing bodies effectively challenged the content of reports, as shown by the lack of evidence in board meeting minutes.

5. Taking effective action

Some action plans and improvements lacked key details, such as timelines, assigned responsibilities, and clear data to demonstrate good outcomes.

Practical tips to imrpove board reporting

Based on the findings, companies can take the following steps to improve Consumer Duty reporting:

1. Make reports clear and specific

Create reports that clearly outline performance in the four Consumer Duty outcomes. Define success clearly and include strategies for closing any gaps

2. Use reliable data

Back up findings with high-quality management information (MI). Use data to track trends, evaluate risks, and show progress over time.

3. Focus on different customer types

Assess how your company supports customer groups like vulnerable customers. Showcase tailored approaches to meet their needs.

4. Set up clear reporting processes

Develop structured, well-documented steps for preparing and reviewing reports. Involve relevant stakeholders for thorough and accurate reporting.

5. Promote a customer-centric culture

Make customer outcomes a priority at every level of the company. Align cultural practices with regulatory goals and encourage teams to focus on delivering positive customer results.

Summary

As companies continue to embed Consumer Duty, the FCA will remain focused on monitoring and supporting progress. By addressing the areas highlighted in review, companies can strengthen their Consumer Duty efforts and ensure they’re delivering value, fairness, and support to all customers.

For more details, read the FCA’s full update here. To learn how Smart Money People can help you meet your FCA reporting requirements, visit our dedicated Consumer Duty page.