Over the past eighteen months, most firms have invested heavily in policy frameworks, board reports, fair value assessments and training programmes. Those foundations were necessary, but they are no longer sufficient.

Supervisory engagement is increasingly focused on:

• What does your management information actually show?
• Where have outcomes deteriorated, and importantly what did you do about it?
• How are vulnerable customers performing compared to the wider population
• What changes have you made as a direct result of Consumer Duty monitoring?

In short, the FCA wants proof!

For lenders and brokers, this typically means deeper scrutiny of affordability outcomes, arrears trends, repeat borrowing, complaints root cause analysis and distribution oversight.

One of the most noticeable developments is the FCA’s increasing reliance on regulatory returns and internal MI to target engagement.

CCR data, complaints submissions and product-level information are being used to identify outliers and trends. Firms showing higher arrears rates, elevated complaint uphold rates or disproportionate vulnerability indicators should expect questions.

This does not necessarily imply misconduct. But it does trigger supervisory curiosity – and firms must be prepared to explain and evidence their position.

Boards should therefore assume that the data they submit is actively shaping the regulator’s risk assessment. You should be aware that recent supervisory engagement shows the FCA requesting not only Consumer Duty reports and board packs, but also the underlying data and rationale used to assess outcomes, so be prepared!

Fair value remains one of the FCA’s core focus areas. In consumer credit, this extends beyond headline APRs. The regulator is looking at:

• total cost of credit across the lifecycle,
• fees and charges applied in arrears,
• commission structures and distribution incentives,
• and whether specific customer cohorts experience poorer value.

Where firms rely on historic pricing rationales without ongoing reassessment, this presents risk. The FCA expects fair value assessments to be dynamic, data-driven and responsive to changing market conditions.

Another key theme emerging in supervision is how firms treat vulnerable customers in practice. It is no longer enough to have a vulnerability policy. Supervisors are asking:

• How many customers have vulnerability flags?
• What differentiated treatment do they receive?
• Does vulnerability correlate with worse outcomes?
• What changes have been implemented where disparities are identified?

Collections and forbearance processes are particularly sensitive in this regard. Firms unable to demonstrate tailored support and learning from outcomes are increasingly exposed.

Consumer Duty has also sharpened expectations around distribution chains.

Lenders remain responsible for customer outcomes even where brokers, introducers or affiliates sit at the front end of the journey. Where complaint patterns, arrears performance or customer misunderstanding appear concentrated in particular channels, the FCA expects intervention.

This is especially relevant in sectors such as motor finance, second charge lending and broker-led unsecured credit. Passive oversight is unlikely to satisfy supervisory scrutiny.

Perhaps the most significant development in 2026 is the FCA’s expectation that Boards understand and can clearly articulate their Consumer Duty narrative.

Senior management should be able to explain:

• the firm’s target market,
• key outcome metrics,
• areas of concern,
• and what actions have been taken in response.

Minutes and evidence of decision-making matter, the FCA increasingly distinguishes between firms that actively engage with outcome data and those that merely report it and will be requesting evidence of the same.

The priority in 2026 should be moving from compliance assurance to supervisory readiness. This includes:

• stress-testing outcome MI,
• reviewing fair value methodologies,
• conducting end-to-end customer journey audits,
• strengthening oversight of distribution partners,
• and ensuring Boards are actively engaged in challenge and decision-making.

The question firms should be asking is simple: If the FCA requested detailed evidence tomorrow, would we be comfortable providing it?

As the FCA’s supervisory intensity increases, firms benefit from independent perspective and structured assurance.

ALPH Legal & Compliance supports consumer credit firms through:

• Consumer Duty outcome testing & MI reviews
• fair value assessments
• pricing governance analysis
• distribution chain & introducer audits
• vulnerability framework reviews
• board-level readiness assessments ahead of supervisory engagement.

The next phase of Consumer Duty is not about rewriting policies. It is about evidencing performance. Visit ALPH Legal & Compliance and take control of your compliance future.