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Embedding the Consumer Duty into your culture

Who this blog is for:

Board members, senior executives, Consumer Duty champions, and those in in-house legal teams, remuneration policy committees, learning and development functions, and other teams involved in the implementation and ongoing monitoring of the Duty.

At a glance

  • The Consumer Duty (the Duty) comes into force on 31 July 2023. The current focus for many firms has understandably been on complying with the four Duty outcomes. This means, for many there has been less focus on the cultural shift required to make the Duty integral to the way firms operate.
  • The interpretation of requirements and expectations under the Duty will evolve over time and to ensure ongoing compliance in a changing environment, firms will need to ensure the Duty is embedded into their culture.
  • Firms should identify the gap between the firm’s current culture and what is needed under the Duty by carefully assessing their current culture and the framework by which it is monitored and assessed.
  • In practice, a robust culture needs to be underpinned by effective governance, setting the right tone from the top. Governance frameworks where the Duty has been embedded should establish clear accountability, transparency, and effective oversight of customer outcomes. Equally, firms need to review their Senior Managers and Certification Regime (SMCR) framework to ensure Duty alignment while satisfying themselves that staff understand how Conduct Rule 6 applies to their roles.
  • Developing a customer-centric culture aligned with the Duty should include empowering employees to raise issues and challenge the firm’s policies and processes to improve customer outcomes.
  • Employees are central to delivering Duty compliance. As a result, firms need to consider reviewing their training programmes and remuneration and incentives structures to ensure they are aligned with the Duty and foster a culture where employees are acting to deliver good customer outcomes.


Over the past year, firms have been delivering their Duty plans, in anticipation of the 31 July 2023 implementation date. The focus for many firms has been on meeting the requirements across the four outcomes of the Duty. But their attention now needs to turn to how they will demonstrate that the firm’s culture aligns with the Duty. Embedding the Duty into a firm’s culture is essential to successful, enduring compliance and the FCA will be expecting to see what actions firms have taken to ensure their culture reflects the Duty.

This article highlights steps that firms may wish to consider to embed the Duty successfully within their culture.

The importance of cultural alignment with the Duty

A robust, customer-centric culture is critical to the successful implementation of the Duty and delivery of good customer outcomes. The FCA’s recent speech in June 2023 highlighted that culture remains central to its supervisory model as it underpins outcomes. A culture aligned to the Duty can provide firms more flexibility to adapt better to new scenarios and the challenges arising from changing customer needs and market, product and distribution landscapes.

In addition, the FCA’s review of firms’ Consumer Duty implementation plans highlighted some concerns around the embedding of the Duty within firms’ culture, specifically that some firms had limited analysis or lack of planned actions.

In our analysis, we use Deloitte’s Culture Assessment Framework and its 16 cultural indicators across four key areas to identify some key actions that firms might want to consider to embed the Duty into their culture.


When purpose is aligned to the organisation’s values and those values balance the need for profit with the need to deliver good customer outcomes, having a purpose-led culture can support meeting the Duty outcomes. In addition, a strategy focused on delivering good customer outcomes with key performance indicators to support it will enable firms to demonstrate their purpose, values and strategy are aligned to the Duty outcomes.

Effective governance is essential for upholding the Duty within a firm. Governance frameworks that embed the Duty are likely to establish clear accountability, transparency, and effective oversight of customer outcomes. Duty considerations should be cascaded to all relevant established committees in the firm. These committees can act as catalysts for a strong customer-centric culture, creating a platform for transparent conversations, monitoring and assessment of outcomes, and ensuring that the customer perspective is consistently considered.

Practically firms can look to:

  • Identify gaps between their current culture and one that is aligned with the Duty: having a culture framework and tools to monitor and measure key cultural indicators are essential to identify gaps and take action where necessary.
  • Review committee membership: committees should have a diverse membership with the appropriate skills, knowledge, and attitude to provide the right oversight and challenge. Diversity will likely enhance discussions and ensure there is robust decision-making that considers a variety of perspectives.
  • Empower the Duty champion: firms should ensure the Duty champion feels empowered to question all aspects of the firm’s practices and processes.
  • Challenge data and MI: board members, executives and staff should scrutinise and challenge the data and MI they are receiving to demonstrate the firm is delivering good customer outcomes.
  • Consider the Duty in light of other change and transformation programmes: for any significant change programme, such as migrations to a new system, ensuring the change is viable and compliant requires early consideration of the Duty. By considering potential adverse outcomes or deterioration in outcomes for customers, firms can take proactive steps to mitigate risks.


Senior leaders play a crucial role in embedding the Duty within the firm’s culture by creating the “tone from the top”, as highlighted by Sarah Pritchard, Executive Director of Markets at the FCA. It is essential that this tone is echoed by middle management with practical actions. Employees at all levels should understand their role in delivering good customer outcomes. This is particularly important as the Duty introduces a sixth Conduct rule, which requires all Conduct Rules staff1 to “act to deliver good outcomes for retail customers”. It emphasises the accountability of all individuals within the firm, regardless of seniority, for their actions and the impact on customers.

Given the focus on accountability, the SMCR is a core element of the firm’s culture. SMCR establishes clear lines of responsibility and firms should consider reviewing their SMCR framework such as statements of responsibilities to ensure alignment with the Duty requirements.

It is also vital that firms create a culture which empowers employees at all levels to speak up and provide challenge, without fear of retaliation. A psychologically safe environment boosts morale, fosters improvements, and ensures that “bad news travels fast” for it to be addressed quickly.2 While harsh penalties for consumer harm might deter harmful actions, they could also inadvertently lead to employees fearing to admit mistakes or attempting to conceal them. This fear of punishment can result in poor customer outcomes, particularly for frontline agents who have significant interaction and influence over customers.

Practically firms can look to:

  • Review the SMCR framework: senior managers should review the SMCR framework to ensure it is aligned with the Duty requirements. This would include reviewing job descriptions, Statements of Responsibilities and the Management Responsibilities Map.
  • Implementing Individual Conduct Rule 6 (‘You must act to deliver good outcomes for retail customers”): senior managers will need to ensure that staff are aware of how Individual Conduct Rule 6 applies to their role. Firms will need to consider which roles have greater relevance and responsibility and the associated staff training needs to raise awareness and reflect such knowledge in job descriptions and responsibilities. Similarly, performance and other internal processes need to be reviewed and updated to take account of the new rule and duty obligations.
  • Improve feedback processes: firms should encourage employees to share ideas and concerns and consider the use of technology to improve the quality, quantity and timeliness of feedback obtained. When a Duty‑related concern is raised, senior managers should review and act on the issue, and communicate the actions the firm has taken promptly.


A firm’s culture is shaped by its individuals, their knowledge, and skills. As a starting point, a firm’s recruitment process needs to reflect its customer-centric culture. Job advertisements, role descriptions, and interview questions should directly relate to the firm’s values and culture to assess the candidate’s alignment to them. Firms should also promote diversity and inclusion to stimulate challenge and varied thinking and cater to a diverse customer base.

Given the extent of change involved as part of the Duty, and the impact this will have across different roles, role-specific training will be required. Firms should also consider ways in which this will be measured and evidenced on an ongoing basis, for example metrics on training completion data as well as engagement with the Duty and culture-related communications.

Firms should also encourage knowledge sharing to facilitate the dissemination of valuable insights and leading practices. It enables employees to learn from each other and can help improve outcomes.

Practically firms should look to:

  • Review and refresh training modules: firms should review existing training modules to ensure the Duty is sufficiently incorporated in the content, particularly regarding how different roles contribute to the delivery of good customer outcomes.
  • Provide ongoing training and upskilling opportunities: firms should consider offering regular training, workshops or seminars to reinforce the Duty requirements and strengthen their workforce’s knowledge and skill. Possible areas of focus include emerging customer trends and leading practices to ensure the firm delivers good outcomes for its retail customers.
  • Create knowledge‑sharing fora: firms should consider creating role‑specific peer level fora, with the purpose of encouraging employees to share insights, experiences, and lessons learned.
  • Review workforce diversity: a diverse and inclusive workforce improves the quality of decision making and is less prone to groupthink. This can lead firms to a more flexible approach to decision making, fostering innovation and adapting products and services to a diverse customer base.


The spirit of the Duty should be reflected in the way that a firm remunerates and incentivises its employees. In its August 2022 Dear Chair of remuneration committee letter, the FCA made clear the importance of remuneration policies that support the expectations of the Duty. More recently, Sheldon Mills, Executive Director of Consumers and Competition at the FCA stressed in a speech that firms should challenge themselves on whether their remuneration and incentives policies are driving good customer outcomes.

Firms should consider how they use Consumer Duty MI for incentive design and performance management purposes to ensure that customer outcomes are considered for incentives at all levels. This MI could also be used to identify areas of potential foreseeable harm linked to remuneration and incentives, including reviewing MI for unusual data patterns which indicate deteriorating outcomes. For example, whether in the run-up to the performance cut-off date there is evidence of sales spikes or unusual patterns from particular sales staff. These spikes could indicate staff are trying to meet incentive targets which in some circumstances could lead to poor customer outcomes.

In addition, firms will need to make sure that remuneration and incentives structures do not discourage staff from identifying and escalating concerns about customer outcomes. Firms need to strike a balance where remuneration and incentives reward behaviours that lead to better outcomes and also those that result in the timely identification of a deterioration in outcomes.

Practically firms can look to:

  • Review and update remuneration and performance management framework and policies: to ensure they are consistent with the Duty.
  • Align reward and incentives structures: firms should satisfy themselves that their reward and incentives structure is consistent with the delivery of good customer outcomes. If balanced scorecards are used, firms might wish to review the metrics relating to customer outcomes when evaluating employee performance.
  • Recognise customer‑focussed achievements: firms can consider recognising employees that have provided exceptional service in delivering good customer outcomes.
  • Review risk adjustment process for variable remuneration: firms may seek to amplify the message of the Duty when reviewing the ex-post risk adjustment process for variable remuneration. In particular, firms should ensure that they give factors related to customer outcomes appropriate priority in the process3.


A customer-centric culture into which the Duty has been successfully embedded is likely to result in better customer and commercial outcomes in the medium term. Achieving this will require firms to act - only through deliberate efforts can a firm successfully develop a culture that embodies the spirit of the Duty. These actions will include aligning remuneration and incentives with customer-centric behaviours, ensuring there is effective governance and oversight to monitor the delivery of good customer outcomes and fostering an environment where employees are encouraged to speak up to share concerns or ideas and feel it is safe to do so.


1 From the Final Policy Statement (PS22/9, Guidance 4.1.28): Rule 6 applies to all conduct rules staff, regardless of whether the person is in direct contact or dealings with retail customers. Conduct rules staff means all staff in scope of COCON and includes the majority of staff of an SMCR firm, the exceptions can be found in COCON 1.1.2

2 Amy Edmondson, The Fearless Organization: Creating Psychological Safety in the workplace for learning, innovation and Growth (2018)

3 Final Guidance 21/5: 3.8 (FG21/5), where there are five criteria that the FCA expects firms to consider for ex-post risk adjustments to variable remuneration.