Square 4 Partners’ 2026 Consumer Duty Research Paper, Compliance, to Culture, to Customer Advocacy, draws on survey responses from senior leaders across 31 regulated firms representing c.25million UK consumers, 48 Consumer Duty board reports, and a bespoke version of YouGov’s Consumer Duty Index (CDI) surveying 8,000 UK consumers across 200 brands.
Firms have enhanced governance and are continuing to strengthen how they use data and insights to understand customer experiences, while boards are taking a more active role in shaping and scrutinising this work.
While overall CDI scores have improved since implementation, progress has slowed across recent survey waves. The attributes most important to long-term customer trust, including acting in customers’ best interests, value for money and customer service, continue to score comparatively weakly.
All set against shifting FCA supervisory focus which has moved beyond assessing the existence of compliant frameworks and policies to the effectiveness of these arrangements in demonstrating and improving customer outcomes in practice.
Together, this raises a critical question: what should boards and firms be asking themselves now to rebalance investment and priorities in the areas that deliver both regulatory confidence and commercial return?
The headlines
96% of participant firms believe they are meeting their Consumer Duty obligations and 93% say leadership has embedded it in the culture of the firm, while 38% of consumers in the Consumer Duty Index agree their provider acts in their best interests.
Although we would expect a difference here, there is a clear indication that confidence internally has not yet translated into perceived trustworthiness externally.
Significant investment in the Consumer Duty has taken place across financial services, and our research shows that this investment has been concentrated in areas most closely associated with evidencing compliance: governance and reporting, outcomes monitoring, training and product governance.
By contrast, product and service design, customer support, communications, and data and technology consistently rank as the lowest investment priorities. These areas underpin how firms actually deliver outcomes in practice and drive customer experience across products, journeys and channels.
Our analysis identifies five critical areas where board confidence diverges from evidential strength, good outcomes practice and supervisory expectation. We explore each in depth in the report, but the headline picture gives boards insights on what they need to know and act on now:
- The evidence base needs strengthening. Too many boards are relying on aggregated MI, narrative assurance and governance processes that document oversight without demonstrating impact. The FCA’s review of board reports found persistent weaknesses, and our own assessment of 48 reports confirms this is not an isolated concern. The issue is rarely intent, but the quality of evidence underpinning the conclusions being drawn.
- Outcomes monitoring shouldn’t be seen as a compliance exercise. Most firms have frameworks in place, but common themes such as over-reliance on lagging indicators, limited root cause analysis and weak linkage between MI and remediation mean boards are receiving assurance more often than insight. Firms struggle to evidence outcomes monitoring is directly shaping products, services, investment or customer support.
- Leadership accountability matters more than ever. The removal of the mandatory Consumer Duty Champion has not reduced regulatory expectations. Our data shows firms who maintained the most visible senior ownership of the Duty reported stronger outcomes monitoring, better board engagement and closer alignment between strategy and customer outcomes. Where ownership is diffused or implicit, the risk to individual Senior Managers under SM&CR is growing.
- Investment is still skewed towards evidencing compliance, not changing outcomes. Firms have invested most heavily in governance, reporting and training. These are areas that evidence compliance, but do not alone change customer experience. Product and service design, data capability and customer support consistently rank lower in firms’ investment priorities, yet these are the areas that most directly drive the outcomes consumers and the FCA care about.
- Vulnerable customers remain one of the FCA’s clearest tests. While most firms have policies, training and monitoring frameworks in place, consumer research shows that vulnerable customers experience materially worse outcomes. Vulnerability governance without demonstrable outcome improvement will increasingly be viewed by the FCA as a supervisory red flag. In YouGov’s CDI, there is an eight-point gap between vulnerable customers’ and non-vulnerable customers’ sentiment (55% vs. 63%, respectively), and firms must continue to look at ways to close this gap.
Have Consumer Duty Expectations been Met?
The Square 4 view is that Consumer Duty has clearly changed the industry. Governance standards are stronger, board engagement is more established, vulnerability receives greater focus, and firms have materially improved their ability to monitor customer outcomes.
The more difficult question is whether these structural improvements are consistently changing customer experience at scale. The evidence suggests progress is real, but uneven. Some firms are beginning to use Consumer Duty as a catalyst for broader operational and cultural improvement. Others remain earlier in the journey, with implementation activity still more advanced than outcomes maturity. The next stage of market evolution will likely depend on which firms can translate increasingly sophisticated governance into faster intervention, better service design and more visible improvements in customer trust and experience.
What will distinguish market leaders?
Consumer duty is increasingly becoming a competitive trust framework. Firms delivering better customer outcomes are increasingly outperforming on customer trust, retention and operational efficiency simultaneously.
In 2026, Consumer Duty is no longer judged by the presence of frameworks, reports or policies, but by whether boards can demonstrate that outcomes insight is actively driving challenge, decisions and action. In summary:
- Culture, not just compliance: boards that own outcomes evidence, drive continuous improvement, and align incentives with customer outcomes as well as financial performance.
- Data and analytics capability: customer outcome insight that is timely and disaggregated by product, journey, channel, segment and vulnerability.
- Proactive management: using monitoring to anticipate and prevent harm, not simply respond to issues or regulatory challenge.
- Evidence of consumer understanding: testing with real customers and demonstrating communications are understood, not just designed to be understandable.
- Integrated vulnerability consideration: designing products, communications and journeys that work for vulnerable customers by default, not through siloed workarounds.
- End‑to‑end distribution oversight: actionable MI from third parties, aligned incentives, and governance that can evidence outcomes across the full chain.
Consumer Duty has entered a materially different supervisory phase. The FCA published six good practice and areas for improvement papers in the first ten weeks of 2026 alone. The direction of travel is unambiguous: the question is no longer whether frameworks exist, but whether boards can demonstrate, with credible, relevant evidence, that outcomes insight is actively shaping decisions and driving change.
The firms pulling ahead are those that have moved beyond treating Consumer Duty as a compliance framework and begun using it as a lens for operational and strategic improvement. They are investing in the capabilities that shape customer experience, building monitoring that drives intervention rather than a retrospective view, and developing governance that delivers insight and drives decision making.
Ready to see where your firm stands?
The full report is available to download now. Fill in the form below to access Consumer Duty in 2026: Compliance, to Culture, to Customer Advocacy, including our board-level priority framework, the ten questions every board should be able to answer today, and the sector observations that show how different parts of the market are approaching the same challenge.
Download
