Since the Consumer Duty came into force, many firms have focused heavily on building outcomes monitoring frameworks, dashboards and suitable MI. Yet the FCA’s latest review suggests some firms may still be missing the point.  

Collecting data, tracking metrics and producing MI on its own doesn’t demonstrate good customer outcomes. Firms need to be able to explain how their monitoring identifies customer risks, what they do when those risks are flagged and whether those actions improve outcomes. 

One of the FCA’s most important points is that firms need practical definitions of good customer outcomes. The better examples cited in its findings did not rely on broad statements about fairness or satisfaction. Instead, it sets out what good outcomes should look like at different points in the customer journey and linked those expectations to a firm’s monitoring – otherwise that is where gaps often begin to show.  

For instance, a firm may be able to describe the measures it tracks but still struggle to say what a good outcome looks like for a customer opening an account, receiving advice, making a withdrawal or asking for support. Without that clarity, monitoring can end up measuring activity rather than outcomes. 

The FCA found examples of firms using clearly defined customer outcome expectations and translating them into measurable indicators. This allowed the firm to identify where outcomes were deteriorating and where intervention was required.  

For boards and senior leaders, a useful starting point is to ask whether every key metric links to a clearly defined customer outcome. If the connection is not obvious, the framework may need further development. 

One practical challenge the FCA highlights is ensuring MI remains focused on outcomes rather than operational performance. It observed examples where firms relied heavily on activity metrics or operational measures without clearly demonstrating how those metrics evidenced customer outcomes.  

For instance, a board pack filled with green indicators may create reassurance, but it does not necessarily demonstrate that customers are receiving good outcomes. Therefore, firms should consider whether their MI helps answer fundamental Consumer Duty questions like:  

• Do customers understand the communications they’re sent? 

• Do customers in vulnerable circumstances achieve similar outcomes to other groups?  

• Do customers receive support when they need it?  

• Is foreseeable harm being identified and addressed? 

If monitoring focuses solely on operational efficiency, important outcome risks may remain hidden.