The FCA’s 16 April 2026 publication: Year 2 Consumer Duty Board Reports: Progress and What Comes Next delivered a clear message: governance, Board oversight, action planning and data use are improving, but many firms still struggle to evidence customer outcomes, demonstrate meaningful challenge, oversee third parties, and assess consumer understanding and support.
Square 4’s May 2026 Consumer Duty Research Paper told the same story. It highlighted gaps in evidencing good outcomes, demonstrating effective monitoring, improving MI quality and identifying outcome gaps for vulnerable customers. The FCA’s 27 July 2026 Outcomes monitoring: good practice and areas for improvement review echoed those findings, making clear that firms must move beyond framework design and show how monitoring is being used to identify issues, inform decisions and improve customer outcomes in practice.
This article brings together insights from Square 4’s review of more than 48 Consumer Duty Board Reports across the financial services spectrum, our Consumer Duty research and recent FCA publications. It considers where firms are making progress, where weaknesses remain and what firms can do now to make Board Reports more efficient, credible and outcome-focused.
What good looks like
The strongest Consumer Duty Board Reports do more than describe activity completed during the year. They enable the Board to reach a clear, evidence-based conclusion on whether customers are receiving good outcomes and whether the firm is meeting its obligations under Principle 12, the cross-cutting rules and the four Consumer Duty outcomes.
Effective reports define what good outcomes look like, explain what the evidence shows, identify where outcomes fall short, quantify the scale and materiality of harm, and set out actions, owners and timescales. They combine quantitative and qualitative evidence, segment outcomes by product, customer group, channel and vulnerability, and track management actions through to completion.
Key themes from our review
Despite clear progress this year, material weaknesses remain across many Consumer Duty Board Reports. The most common issues include:
Executive summaries: confidence is high, but evidence is not always clear
Many Executive Summaries still give Boards a description of governance activity rather than a clear, evidence-based assessment of customer outcomes. This is particularly notable from Square 4’s research that found 89% of firms reported having a robust Consumer Duty Board Report, 89% reported clear senior management ownership and 96% reported improved MI and outcomes visibility. Yet the evidence in reports does not always support that confidence. While firms have invested significantly in governance frameworks, reporting structures and monitoring arrangements, many reports still struggle to demonstrate how these are driving better customer outcomes or enabling meaningful Board challenge.
The best summaries answer the questions Boards and regulators are most likely to ask: are customers receiving good outcomes, where are outcomes falling short, what harms or risks have been identified, has the Board challenged the evidence, and is the firm meeting its obligations under the Duty?
The real test is no longer whether governance arrangements are in place. The focus has shifted to whether firms can evidence the outcomes those arrangements are delivering, demonstrate how Boards have challenged the findings, and show that identified risks and harms have led to clear decisions, actions and measurable improvements in outcomes for customers.
Practical steps for firms
- State explicitly whether the firm is meeting Principle 12, the cross-cutting rules and the four outcomes.
- Focus on outcomes, risks, impact and harm rather than completed activity.
- Ensure conclusions are supported by evidence elsewhere in the report.
MI-heavy reporting: more data, but not always more insight
Square 4’s research data is encouraging: 96% of firms reported improved data and MI visibility, 81% said they have a robust outcomes monitoring framework across all four outcomes, and 85% reported proactive remediation where poor outcomes had been identified. However, more MI does not automatically create better insight.
Across many reports, data is presented with limited explanation of what it reveals about customer experience, emerging harm, the drivers of poor outcomes or whether actions are improving outcomes. Complaints, remediation activity and customer metrics are often reported, but with little assessment of the scale, severity and materiality of customer harm.
We also continue to see an over-reliance on activity and process measures, such as training completion rates, communications issued, reviews undertaken and SLA performance. These metrics demonstrate activity, but not necessarily whether customers understood communications, received appropriate support, achieved fair value or experienced good outcomes.
As both our research and the FCA’s outcomes monitoring review demonstrate, mature monitoring frameworks focus on outcomes rather than activity. They help Boards understand what has happened, why it happened, what material risks have been identified and what action is required. The strongest Board Reports provide the evidence, analysis and insight needed to support robust conclusions, effective challenge and informed decision-making, without overwhelming Boards with data.
Practical steps for firms
- Define, measure and segment good and poor outcomes.
- Interpret MI, quantify harm and show how insight changed decisions or actions.
- Replace process-heavy reporting with evidence of customer outcomes, experience and impact.
Vulnerable customers: measuring activity is not the same as evidencing outcomes
Vulnerability reporting has improved, but many firms still struggle to demonstrate whether vulnerable customers achieve outcomes comparable to other customers. Square 4’s research found that 85% of firms monitor outcomes for vulnerable customers and 74% have adapted support arrangements in place. The key question is whether those arrangements are reducing harm and closing outcome gaps.
Reports often focus on the number of vulnerable customers identified, referrals made, adjustments offered or colleagues trained. While these are useful indicators, they do not prove that outcomes have improved, and aggregated MI can mask material differences in experience, access, understanding and financial outcomes.
This reflects FCA findings that some firms reported strong vulnerability frameworks despite vulnerable customers experiencing materially worse outcomes than the wider customer population. Increasingly, the effectiveness of a vulnerability framework is being judged by the outcomes it delivers rather than the processes it operates.
Strong reports quantify outcome gaps, explain root causes and track whether support, adaptations and remediation are delivering measurable improvements. Vulnerability is one of the clearest tests of Consumer Duty effectiveness. The issue is no longer whether firms have frameworks in place, but whether they can demonstrate those frameworks are delivering better outcomes for the customers who need support most.
Practical steps for firms
- Compare and segment outcomes for vulnerable and non-vulnerable customers and identify material differences.
- Use root cause analysis to understand why gaps exist.
- Track whether support, adaptations and remediation reduce harm over time.
Culture: evidencing behaviours through decisions and outcomes
Culture remains one of the more difficult aspects of Consumer Duty for firms to evidence effectively. While most Board Reports now include a culture section, many are still heavily narrative or activity-based, focusing on initiatives undertaken rather than whether the right behaviours are embedded and leading to better customer outcomes.
Square 4’s research highlights the gap: 93% of firms reported strong leadership buy-in and 89% said Consumer Duty is embedded within strategy and Board-level decision-making, yet only 38% of consumers believe their provider acts in their best interests. This suggests a potential disconnect between firm confidence and customer experience.
Across many Board Reports, culture is evidenced through training completion rates, awareness campaigns, employee engagement initiatives, governance forums and leadership communications. These activities can support cultural change, but they do not in themselves demonstrate that customer interests are shaping decisions, behaviours are changing or outcomes are improving.
Strong reports link culture behaviours to customer outcomes. They evidence culture through decisions, incentives, challenge and customer experience, showing where customer outcomes have influenced priorities, where poor outcomes have been challenged, and how Consumer Duty behaviours are translating into better outcomes in practice.
Practical steps for firms
- Show how customer outcome insights influence behaviours, decisions and business priorities.
- Evidence Board challenge and management action in response to poor outcomes, risks or harms.
- Move beyond metrics such as training completion rates and employee engagement scores by showing how customer interests influence decisions, particularly where they conflict with commercial objectives.
Business strategy: demonstrating how Consumer Duty shapes decisions
Strategy sections are becoming more common in Consumer Duty Board Reports, reflecting the FCA’s expectation that Consumer Duty should shape business decisions, not sit alongside them. However, many reports still describe future plans without showing how customer outcomes influenced the choices made.
This is particularly important given the Board’s obligation to assess whether the firm’s future strategy is consistent with Principle 12 and PRIN 2A. While strategy is frequently discussed, many reports stop short of demonstrating how that assessment has been undertaken in practice.
This was a recurring theme in both Square 4’s Consumer Duty Research Paper and our review of Board Reports. While 89% of firms reported that Consumer Duty is embedded within strategy and Board-level decision-making, many struggle to demonstrate what that means in practice. Consumer Duty is often referenced in strategic discussions, but there is limited evidence of how customer outcomes have influenced decisions, priorities or investment choices.
Strategic initiatives such as product development, pricing reviews, digital transformation, distribution changes and service enhancements are often described in detail. What is frequently missing is an explanation of how foreseeable harms were assessed, how customer outcomes influenced decision-making, what improvements are expected and how success will be measured.
Strong strategy reporting shows how customer outcomes, foreseeable harms and identified risks have shaped decisions. It explains why choices were made, what risks were considered and how the Board will assess whether the intended customer outcomes have been delivered.
Practical steps for firms
- Show how customer outcome insight influenced strategic choices.
- Define the expected outcome benefits, risks, and post-implementation measures.
- Evidence how foreseeable harms have been identified, assessed and considered as part of strategic planning.
Distribution chains and third parties: proving outcomes across the customer journey
Distribution chains and third-party oversight remain among the least mature areas of Board reporting. Firms often explain governance arrangements, due diligence, committees and service reviews, but provide less evidence of the outcomes customers experience across the end-to-end journey.
This aligns with both Square 4 research and FCA reviews. Firms are generally more comfortable reporting on activities they directly control than on outcomes delivered through distributors, intermediaries and outsourced providers. However, accountability for customer outcomes remains with the firm.
Common gaps include limited visibility of outcome differences between direct and intermediary-distributed business, outcomes delivered by outsourced providers, customer journey friction points, root causes of poor outcomes and the effectiveness of remediation activity.
Strong reports show whether outcomes differ by channel, where risks are emerging, the impact on customers and how management and Boards respond when concerns are identified. Firms may outsource activities, but they cannot outsource accountability for customer outcomes.
Practical steps for firms
- Segment outcomes across direct, intermediary and third-party channels.
- Define clear MI and outcome measures for distributors, intermediaries and outsourced providers.
- Show Board challenge and remediation where third-party risks are identified.
Consumer understanding and support: evidencing the customer experience
Consumer understanding and customer support remain two of the most challenging Consumer Duty outcomes for firms to evidence effectively. Reports often contain extensive information on communication reviews, website updates, document redesigns, testing activity and operational service metrics, but less evidence of what customers understood, how they experienced support or whether interventions improved outcomes.
Square 4’s research and FCA reviews point to the same challenge: firms are often better at evidencing activity than impact. Consumer understanding is not about the number of communications reviewed, just as customer support is not about call waiting times, service levels or complaint volumes. The real test is whether customers can make informed decisions, access support when they need it and achieve good outcomes throughout their journey. Boards need evidence of where customers experience misunderstanding, barriers or friction, how this differs across customer groups, including vulnerable customers, and whether support is timely and effective.
The strongest reports combine operational MI, behavioural data, customer feedback, complaints analysis, vulnerability insights, root cause analysis and customer journey evidence. This gives Boards a fuller view of customer experience, not just what the firm communicated or how quickly it responded.
Practical steps for firms
- Define good understanding and effective support across key journeys and decision points.
- Use behavioural data, feedback, complaints and journey insight to identify misunderstanding, friction and barriers.
- Evidence how communications and support interventions improved customer behaviour, decision-making and outcomes.
The Shift from Frameworks to Outcomes
The findings from Square 4’s review of more than 48 Consumer Duty Board Reports, our research, and recent FCA publications, suggest that Consumer Duty expectations and reporting is entering a more mature phase. The focus is no longer on implementation and governance arrangements, but on evidencing outcomes, challenge, decisions, and improvement.
Board Reports should provide clear evidence that customer outcome insights are informing Board challenge, management decisions and remediation activity, while demonstrating how foreseeable harms are identified, mitigated and monitored across different customer groups, including vulnerable customers, and those served through third parties and distribution chains.
The strongest reports do more than describe monitoring activity. They show where outcomes are falling short, how the Board has challenged the evidence, what decisions have been taken and whether actions are improving customer outcomes. They provide a clear line of sight between outcomes, challenge, decisions, actions and impact.
As supervisory scrutiny evolves, firms that can evidence impact, accountability and continuous improvement will be better positioned than those relying on governance narratives and retrospective assurance alone.
How Square 4 can help
Square 4 works with firms across the market to design, review and independently challenge Consumer Duty Board Reports, helping Boards move beyond compliance to defensible, decision-ready reporting.
Our support focuses on strengthening outcome evidence, crystallising Board conclusions and ensuring reports stand up to regulatory scrutiny.
To discuss how we can support your next year’s Board Report, contact us at hello@square4.com
Sara Haworth – Principal Consultant
