Regulatory gap analysis: Customer outcomes monitoring under Consumer Duty

The FCA has made its expectations clear: outcomes monitoring is not a compliance exercise to be completed once and filed away. It requires firms to demonstrate, continuously and evidentially, that their products and services are delivering good outcomes for retail customers. Yet across the industry, a consistent pattern of weaknesses is emerging in how firms have defined what good looks like, how they test for it, and how their governance responds to what the data is telling them.

Many firms have built monitoring frameworks that are more process-focused than outcome-focused. Testing activity often mirrors traditional QA rather than examining discrete sections of the customer journey. MI tends to be limited in scope, poorly segmented, and not sufficiently connected to senior management decision-making. These are the common themes surfacing through regulatory engagement, thematic reviews, and assurance work.

Firms should be asking whether their outcomes monitoring framework is genuinely fit for purpose: whether roles and responsibilities are clearly defined across the three lines of defence, whether outcome definitions are measurable and reportable, and whether the Board has the visibility it needs to challenge and drive change.

What does this gap analysis cover?

To support firms in taking stock of where they stand, we've developed a practical self-assessment gap analysis aligned to FCA expectations under Consumer Duty — specifically Principles 12 and PRIN 2A.9.

It covers the four areas where weaknesses most consistently appear:

Framework — whether a documented approach to outcomes monitoring exists, how high-risk products, services and journeys have been prioritised, how 'good' and 'poor' outcomes have been defined, and whether accountability for outcomes monitoring is clear across the business.

Testing— whether testing scope is appropriate and representative, whether it is focused on discrete sections of the customer journey rather than individual interactions or process adherence, and whether the approach is sufficiently distinct from traditional monitoring activity.

MI and Data — whether the firm has access to the data needed to evidence outcomes, whether MI is segmented by customer characteristics, and whether there are processes in place to assess data quality and address gaps, including where reliance is placed on third parties in the distribution chain.

Governance — whether outcomes monitoring is reported regularly to senior management and the Board, whether governance forums are equipped to review and challenge what is presented to them, and whether monitoring outputs are demonstrably informing decisions and driving action.

The gap analysis enables firms to quickly identify where weaknesses exist and where potential regulatory gaps may be, using a straightforward self-assessment format. It is designed to be practical and honest, and should be used as a starting point for a genuine assessment of capability.

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