Proposed changes to the scope and proportionality of Consumer Duty could reduce unnecessary compliance work, but firms must continue to demonstrate improved customer outcomes, according to Capco.
The comments come from Michael Shand, managing principal at global management and technology consultancy Capco, as the FCA’s consultation on changes to the scope and proportionality of Consumer Duty closes today, 18 September 2026.
The proposals are intended to give firms greater clarity over when the Duty applies and how responsibilities should be divided across distribution chains.
Shand said: “The FCA proposals to the scope and proportionality of the Consumer Duty framework represent a welcome and pragmatic refinement, helping to reduce ambiguity and give firms greater certainty over where and when the Duty applies.
“This greater clarity should be a relief for firms, reducing unnecessary compliance activity, particularly for those that do not own the end-consumer relationship or have limited influence over retail customer outcomes.
“By removing duplication and aligning responsibilities more closely with firms’ roles within the distribution chain, these proposals should allow resources to be focused where they can have the greatest impact.
“Importantly, this should not be viewed as a dilution of Consumer Duty standards, rather it is an opportunity to concentrate accountability on those firms best placed to deliver better outcomes for consumers.
“The next phase of Consumer Duty should therefore be less about implementation and governance build-out and more about demonstrating tangible evidence of good outcomes in practice.
“While reporting volumes and governance forums may reduce, firms will still need robust data and management information to identify poor outcomes and emerging customer risks, with technology and potentially AI offering opportunities to do this more effectively.
“Boards and Senior Managers will also need to remain close to the real-world outcomes customers are experiencing, rather than simply reviewing evidence of compliance.
“Any efficiencies created through simplification should enable greater focus and investment in areas that directly improve those outcomes, from digital journeys and customer support to stronger product propositions.
“Whether these reforms are a success will hinge on whether they maintain the cultural shift we have seen over the first three years of the Duty.
“Simplification is welcome, but firms must remember the end goal of the Duty remains the same. By enabling firms to focus less on proving compliance, we will hopefully see a measurable improvement for outcomes for consumers, including identifying and supporting vulnerable customers as economic pressures persist.”
