FCA Consumer Understanding Good Practice Review

- Consumer Duty

Read the findings of our review into firms' approaches to consumer understanding.

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  Consumer understanding: good practice and areas for improvement

• 1. Introduction

• 2. Who this applies to

• 3. Key findings

• 4. What we looked at

• 5. Management information and testing

  • Good practice
  • Areas for improvement

• 6. Innovation and communications design

  • Good practice
  • Areas for improvement

• 7. Vulnerability and accessibility

  • Good practice
  • Areas for improvement

• 8. Financial promotions

  • Good practice
  • Areas for improvement

• 9. Governance and oversight

  • Good practice
  • Areas for improvement

• Resources

  • Read our Good and Poor Practice series

Read the findings of our review into firms' approaches to consumer understanding.

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1. Introduction

We’re supporting consumers in navigating their financial lives by working with industry to build trust, encourage product innovation, and make sure the right information and support are available.

Consumer understanding is an outcome under the Consumer Duty (the Duty). The Duty sets a higher standard for retail consumer protection. We want firms to help customers make effective, timely and properly informed decisions, and present information that is fair, clear, and not misleading. Customers should have the information they need, at the right time and presented in a way they can understand. This is key to firms creating an environment in which customers can pursue their financial objectives. The Duty provides the flexibility of an outcomes-focused, rather than a prescriptive approach.

Strengthening consumer understanding also supports our strategic priority of helping consumers navigate their financial lives. This aims to make sure consumers can understand and engage with information provided to them. We encourage firms to innovate the ways in which they communicate with and support their customers.

This report sets out our findings on how firms are delivering the consumer understanding outcome. To help firms meet the requirements, we are providing clear expectations, examples of best practice and areas for improvement.

Our full requirements and expectations are in PRIN 2A.5 and Chapter 8 of our Finalised Guidance (FG22/5 PDF). This report should be considered alongside the other outcomes and cross-cutting obligations under the Duty (products and services, consumer support and price and value).

The examples of good and poor practice in this report are provided to help firms learn from each other and support improvements in consumer understanding across the market. They do not create new regulatory requirements, and firms do not need to adopt every example. However, firms should use these insights to assess their own approach and identify where improvements may be needed to meet their obligations under the Consumer Duty.

Smaller firms

We expect all firms to deliver good outcomes for their retail customers, no matter the size of the firm. Governance, monitoring and testing should be proportionate to the size and scale of business.

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2. Who this applies to

The examples of good and poor practice below will be relevant to all regulated firms that provide products or services to retail customers. This includes firms that design, manufacture, distribute or support products and services. It also applies to firms whose communications or customer journeys affect how customers understand information and make decisions.

The expectations apply to firms of all sizes, and approaches may be proportionate to a firm’s scale and resources.

The publication may also be useful to industry bodies, consumer groups, charities, policymakers and other stakeholders who want to improve customer understanding across financial services.

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3. Key findings

This summary outlines good practices and steps firms can take to strengthen their communications and meet expectations under the Duty. To support customer understanding, firms should make sure communication design, testing, monitoring and governance are a coherent, end-to-end process.

Using insight to identify where consumers struggle Testing communications with real customers Communicating clearly, simply and accessibly Designing journeys and tools that support understanding Supporting customers with characteristics of vulnerability Clear, fair and balanced financial promotions Governance and oversight

Using insight to identify where consumers struggle

Good practice involves firms analysing insights from multiple sources, including call listening, complaints, chat transcripts, website analytics, drop-off data (customers who start but do not complete a specific process) and surveys. They review this evidence regularly and prioritise meaningful improvements rather than simply making cosmetic changes.

Testing communications with real customers

Good practice involves testing both before and after changes. Firms use proportionate tools such as surveys, comprehension checks, A/B testing (before and after) and feedback from frontline interactions. They verify whether changes improve customer understanding and adapt based on the results.

Communicating clearly, simply and accessibly

An effective approach includes plain language, clear structure, visual hierarchy and layered content. Firms place essential information upfront, highlight risks and exclusions early, and support those who need alternative or accessible formats.

Designing journeys and tools that support understanding

Well-designed customer journeys incorporate calculators, videos, walkthroughs and summaries. These tools are tested to make sure they genuinely help customers and refined based on user evidence.

Supporting customers with characteristics of vulnerability

An effective approach is to identify needs early, adapt communications accordingly and embed vulnerability considerations into governance, training and testing. This includes testing with vulnerable cohorts and ensuring accessibility throughout journeys.

Clear, fair and balanced financial promotions

A good approach aligned with the Duty makes sure promotional content is balanced, accessible and easy to understand. Firms give risks equal prominence to benefits, avoid jargon and test that key messages - including eligibility criteria and limitations - are properly understood.

Governance and oversight

Good practice includes clear ownership of the consumer understanding outcome. Firms maintain defined governance, review management information (MI) regularly, track actions, and make sure decisions lead to improvements. Oversight is embedded into everyday business processes.

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4. What we looked at

We used a wide evidence base to understand how firms are embedding the consumer understanding outcome. We combined supervisory findings, form data, behavioural research, and extensive engagement with industry bodies, charities and consumer groups to build a comprehensive picture of current practice.

We reviewed wider insights to understand the challenges consumers experience. Our 2024 Financial Lives Survey found that 12% of adults (around 6.3 million) had limited understanding of the products they held and 19% (10.3 million) had low confidence with everyday numeracy. Three in 10 also said their preferred communication channel had been withdrawn, which caused difficulty for most of them.

In September 2025, we carried out a survey of 38 firms including insurance, retail banking, payments, consumer finance and Contract for Difference providers. We asked about governance, testing, MI, communication design and support for customers in vulnerable circumstances. The sample included small, medium and large firms.

We looked at small, medium and large firms, recognising that approaches may differ depending on business models and resources.

We focused on the overarching requirements of the Duty in relation to the support provided to customers across these 5 areas:

• Management information (MI) and testing.
• Innovation and communication design.
• Vulnerability and accessibility.
• Financial promotions.
• Governance and oversight.

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5. Management information and testing

Good practice

Using insight to understand where customers struggle

Positive examples included firms using multiple sources to gain insights, such as call listening, complaints, chat transcripts, drop-off data and surveys, to understand which parts of their communications customers find unclear. They review this insight regularly and prioritise improvements based on real evidence, not assumptions.

One firm used website analytics to find out where customers became stuck during the sales process, then tested improvements and monitored whether outcomes improved. This decreased the number of clicks to get to the required outcome and reduced calls to their helpline.

Testing communications before and after launch

Good practice includes testing communications in a proportionate way, using methods such as short surveys, comprehension checks, A/B testing or customer callbacks. Good practice includes documenting what changed, why it changed and the impact of each change, ensuring a clear link between insight and action.

Effective testing uses new, outcomes-focused measures designed to improve consumers’ understanding. This helps firms generate meaningful metrics, identify what works best for different customer groups, and diagnose issues earlier.

Smaller firms

A smaller firm tested its renewal letter with a small sample of customers, including 2 with sight impairments. Feedback showed that the layout and headings were hard to follow. The firm introduced a large‑print design, a 100‑word summary, and clearer next steps. After launch, quick follow‑up calls and a micro‑survey showed better understanding of excesses and cancellations, and fewer complaints about unclear letters.

Further examples included calling customers after sending revised letters to check understanding, surveying users during digital trials, or comparing outcomes before and after updates to wording or layout across different communication channels.

Some smaller firms used simple, effective, and proportionate testing methods to make sure customers understood their products and services.

A smaller firm carried out post-sale comprehension calls using a short questionnaire to confirm that customers understood key aspects of the product, including monthly payments, term length, and what to do if they fell behind.

The firm recorded the results securely and used the insights to improve the overall sales journey. They also provided feedback to manufacturers where appropriate. This approach gave the firm meaningful evidence of consumer understanding.

Using testing to improve journeys and tools

Some firms test calculators, videos, walkthroughs or summary pages to confirm whether these tools genuinely help customers understand information. Where improvements are needed, firms iterate and retest to validate the impact.

Other examples include updating a calculator after identifying customer confusion, simplifying a video explainer and retesting comprehension, or redesigning a step in a journey and verifying reduced drop off.

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Areas for improvement

• Weak evidence of testing: Some firms said they had tested their communications but provided little evidence. In many cases, testing was often superficial, one-off or poorly documented.
• Unclear use of MI and insight: Some firms collected MI such as drop-off rates or chat logs but could not explain how this informed their assessment of consumer understanding or supported decisions. We do not expect every data point to lead to action. But firms should be able to show why the MI they collect is relevant, how they review it, and how it helps them identify where customers may not understand key information. Several firms continued to rely on sales data or the absence of complaints as evidence of understanding. This does not provide reliable assurance, even taking into account the size and complexity of firms.
• Insufficient testing with different customer groups: Some firms did not test communications with people with accessibility needs, language requirements or lower financial capability. This meant it was unclear whether changes supported consumer understanding for these groups. It was not always clear that firms had assessed their target market to make sure their communications were designed appropriately. Firms should be mindful of consumers with characteristics of vulnerability or low capability while acting in good faith. Not testing communications for these cohorts increased the risk that they may receive poor outcomes.
• No follow-up to assess whether changes worked: Changes were made, but the firm did not check whether they had worked. Records often failed to show what had been changed, why it was changed, or the impact on their customers.

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6. Innovation and communications design

Good practice

Innovation and communication design play a central role in helping customers understand information, navigate key decisions and avoid causing foreseeable harm. Designing communications deliberately - using clear structures, plain language, layering, and accessibility principles - rather than assuming customers will interpret information as intended.

Layering can be an effective way to structure information flows without overwhelming the consumer. For example, some firms found ways to make long and complex documents easier to digest by presenting key information upfront and signposting to wider information. Firms also looked to drip-feed important messaging at the right time to customers throughout the customer journey.

Clear, simple design that helps customers find key information

Good practice involves prioritising essential information, presenting it upfront, and reducing complexity. Firms use plain language, intuitive layout, visual hierarchy and summaries to guide customers. Content is structured so customers understand the most important points first, with detail layered beneath.

Other examples include simplifying digital journeys, presenting key messages earlier, improving visual hierarchy and testing design changes to confirm improved comprehension.

Simplifying information beyond reducing word count

Effective simplification is not only shortening text but organising it so customers can understand and act on what matters. This may involve short summaries, clear definitions, QR‑linked explanations and clear signposting.

Some firms are using interactive FAQ dropdowns to help customers find information quickly and in a more intuitive way. These ‘clickable FAQs’ and expandable sections allow customers to reveal additional information customers need, reducing the chances of being overwhelmed and helping them understand complex topics step by step. FAQs are there to provide additional narrative to customers and not to replace the need for clearer customer communications.

Smaller firms

Some smaller firms use clear, easy‑to‑read summary sheets to sit on top of lengthy terms and conditions, particularly where they cannot change the underlying legal wording but still want to support customer understanding. These summaries present the key points in straightforward language, setting out the main features of the product or service alongside any significant exclusions or limitations, with both given equal prominence. They also explain costs and charges in an accessible way, provide the phone numbers or contact routes customers can use if they need help, and outline cancellation rights in plain, non‑technical terms. By giving customers this clear overview upfront, firms help make sure essential information is easy to find and understand, even when the full terms remain complex.

Some firms are using prompts, tools, and supportive interactive formats

Some firms use calculators, walkthroughs, and reminders to help customers understand processes or build confidence in decisions. These tools are tested to make sure they support comprehension without adding cognitive load.

A firm uses short videos, interactive diagrams, and clickable FAQs to break down complex processes. These tools let customers absorb information at their own pace and make it easier for them to understand key steps or risks.

A firm is using real-time prompts to stop customers from making common mistakes. These include warnings during payment journeys—such as alerts about potential scams—or messages that explain why certain information is needed. Some firms also use chatbots and virtual assistants to answer questions instantly or guide customers through a journey step by step.

Positive friction creates short, purposeful pauses in the customer journey that help consumers slow down, reflect, and avoid harmful snap decisions.

These examples show how firms are using simple, practical technology to improve clarity, support customers at important moments, and reduce the chance of errors that could lead to harm.

Designing for accessibility and diverse needs

Research has found that 1 in 7 adults have literacy skills at or below those expected of a 9 to 11-year-old. Our Financial Lives Survey also found 17.7 million adults (34%) have poor or low levels of financial numeracy.

Firms perform well when they tailor designs for customers with low digital confidence, lower financial capability, sensory impairments, or different communication needs. This includes adapting formats, improving readability, and testing with users who face additional challenges.

Examples include improved colour contrast, alternative formats, meaningful alt‑text, text rewrites, and layouts tested for screen readers. Sometimes communicating in a simplistic way is most effective.

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Areas for improvement

• Cosmetic changes that do not address root causes: Some firms made surface‑level changes, shorter wording, new icons or colour changes without improving clarity, sequencing or prominence of key information. Our review continued to find customers missing or misinterpreting core points.
• Little or no testing of new designs: Several firms did not test communications with customers or relied on very small, unrepresentative groups. Some assumed an absence of complaints meant communications were clear.
• Failure to adapt communications for different customer needs: Some firms presented the same design and format to all customers without considering customers in vulnerable circumstances who may have accessibility needs, language preferences or lower digital confidence. This created foreseeable barriers to understanding.
• Overlong documents with limited signposting: Some firms continued to produce long, dense documents without summaries, visual hierarchy or navigational cues. Customers were expected to locate critical information without support, increasing the likelihood of misunderstanding. Firms committed to using jargon-free and intelligible language but had limited evidence to show this had been embedded in communications to customers. To meet Duty expectations, firms should make sure communication design choices are evidence‑based, tested with diverse customer groups, and continually improved through clear insights and monitoring.

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7. Vulnerability and accessibility

Good practice

Data from our Financial Lives Survey (2024) showed 22% of adults lacked confidence managing their money, with 36% having low knowledge about financial matters. If a firm develops communications about a simple mass market product, we expect them to take these characteristics into account and communicate information in as simple a way as possible to support customer understanding.

Practically, this means taking more active steps so that retail customers have the information and support they need, when they need it, to make and act on informed decisions. In turn, this will enable and support consumers to pursue their financial objectives.

More broadly, design features should account for consumers with lower financial capability and characteristics of vulnerability. Where there is a higher concentration of these cohorts, the level of mitigation should be proportionate to the risk.

Proactive identification and tailored support

Firms should take particular care when communicating with consumers in vulnerable circumstances and consider varied needs, accessibility, and digital confidence. Firms should actively design and test communications so vulnerable consumers can understand them. Some firms embedded structural vulnerability assessments at key decision points such as onboarding, renewal, and arrears.

A firm introduced a short capacity and vulnerability assessment during its onboarding stage and at moments of potential stress, for example, during early signs of payment difficulty. These assessments produced timestamped notes and flags visible to frontline staff.

Staff then adjusted the firm's communication accordingly to better meet the needs of their customers in vulnerable circumstances. After carrying out several hundred assessments, the firm saw higher engagement and quicker actions from customers, which helped to reduce foreseeable harm.

Smaller firms

Firms with limited resources could focus on identifying the characteristics, behaviours or communication patterns that may affect a customer’s ability to understand information or make informed decisions. This enables firms to concentrate on the most common risks to consumer understanding within their customer base. Firms would still need to respond to individual or unexpected needs but concentrating resources can help customers receive clear and consistent support.

One small firm built prompts into its fact find and sales process, creating a space for customers to disclose their circumstances. It also took additional steps to flag cases where vulnerability was confirmed or strongly suspected, discussing these in monthly team meetings to share learning, refine indicators, and support consistent, tailored responses.

Accessible 'tell-us-once' systems

Some firms implemented more centralised ways of recording their customers' accessibility needs and preferences (such as communication format, language preference, large print). Those adjustments were then applied consistently across future interactions. Where executed well, this reduced consumer burden and allowed greater attention to be focused on understanding.

Smaller firms

A smaller firm added a ‘tell us once’ update to its internal system where staff were prompted to record how a customer wanted to hear from the firm, as well as language preferences and any other reasonable adjustments.

The requirements were saved against the customer profile and applied to all future interactions.

The firm built in a level of automation which meant that customer requirements would be pre-applied to all engagements. Letters and emails were adjusted automatically, and call handlers were automatically shown reminder pop-ups.

Each adjustment showed when it was last reviewed so staff were able to monitor effectiveness and consistency.

The well-rounded approach meant consumers did not need to repeat sensitive details and communications were delivered in a suitable format, making key points easier to understand.

Testing with vulnerable cohorts

Some firms regularly tested communications with groups of customers that were representative of the intended recipients.

Other examples included testing communications with consumers with characteristics of vulnerability. For example, customers with lower digital confidence and capability.

Typical improvements included simplifying accessibility by reordering content to increase visibility of important information, reducing volume, and adding plain language explanations for complex terms.

A firm tested all new product communication with a sample of customers in vulnerable circumstances. It captured key insights including comprehension scores, measuring these against its own internal target of at least 80% correct recall of key points. This ensured a greater number of their customers understood the communications.

The firm also reviewed live chat transcripts weekly to identify unclear wording and vulnerability cues. Using a wider range of testing methods helped support consumers in pursuing their financial objectives. This enabled them to have the support they need, when they need it, to make and act on informed decisions.

Communications were then reviewed and redrafted based on customer feedback. This process was repeated until results met the 80% target and was used to influence future design decisions across different channels.

Smaller firms

Smaller firms may not have the resources or customer base for extensive testing with customers in vulnerable circumstances. However, they must still carry out testing that is proportionate to their size and market presence.

A smaller firm prioritised 2 high impact communications, its arrears letters and renewal webpage. It ran simple tests fortnightly with 3-5 customers drawn from recent contact. It focused on consumers with lower digital confidence and English as a second language.

Testing was mostly phone-based and involved staff asking customers to read back key elements of their product with policy documents in hand. Findings were then used to refine original communications, resulting in fewer repeat contacts from recent customers, indicating greater understanding and comprehension.

Monitoring outcomes and acting on insights

Some firms typically monitored outcomes for customers in vulnerable circumstances as a distinct MI category. This meant that they could correctly identify trends sooner, driving focused change and limiting harm to customers.

A firm took a proactive approach by regularly reviewing call and chat transcripts, top complaint reasons and repeated customer contact. Results were presented at quarterly forums where changes would be agreed.

The firm also monitored drop-off rates and ran A/B tests to improve how and when it communicated. Insights from these simple checks highlighted areas where customers faced challenges and led to changes in communication timing and format, reducing confusion and improving customer satisfaction.

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Areas for improvement

• Reactive rather than proactive: A notable number of firms operate reactively. This lack of preparedness was apparent in vague or underdeveloped policies and processes. It included firms’ approach to identifying consumers with characteristics of vulnerability and those with lower financial capability. This approach increases the risk of poorer outcomes for consumers, particularly for consumers in vulnerable circumstances who have historically been more susceptible to harm.
• Reliance on general knowledge with no proactive mechanisms: Some firms told us that they had ‘considered vulnerability’ but failed to provide details on how this translated into practical changes or measurable outcomes.
• Limited alternative formats and assisted channels: While readability testing was common, several responses under-specified alternative formats (eg, large print, audio, BSL) and assisted channels for customers with low digital capability. This gap created a risk that those most in need of support did not get it.
• One-off initiatives without governance: Some firms described ad-hoc improvements but did not appear to embed them into governance or control frameworks. Without systemic integration into day-to-day operations, it was difficult for firms to show changes would be sustainable or consistently applied.
• Initiatives without results or evidence of what changes: Some firms cited testing they had carried out or referenced new tools they had introduced. But they were not able to show outcomes for customers in vulnerable circumstances. Many firms did not provide comprehension measures, acceptability targets or scaling of initiatives beyond pilot schemes. The lack of data weakened auditability and made it more difficult to evidence improving standards. Firms should be able to evidence that their initiatives support good outcomes and that they do not result in customers, especially those in vulnerable circumstances, being disadvantaged or taken advantage of in a way that is likely to cause detriment.

Smaller firms

Several smaller firms told us they did not have clearly defined processes in place to identify or flag vulnerability.

Some firms appeared to rely heavily on having known most of their customers for a longer period. Others told us their staff had experience in customer service. This lack of additional process reduces auditability and risks inconsistent treatment of consumers with characteristics of vulnerabilities.

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8. Financial promotions

Good practice

We expect firms to design promotions that match their customers’ needs and abilities, including people with low financial confidence or who may be vulnerable.

Ensuring accessibility and fair messaging

Firms performing well avoid jargon, use clear summaries, and make sure core messages remain visible across formats such as mobile, email or social media. Their digital and printed layouts are designed carefully so that important information does not get lost or obscured, even when content is resized or reformatted on different devices. This means customers receive the same clear, balanced information wherever they encounter the promotion, supporting better and more informed decisions.

Monitoring effectiveness and acting on insight

Good practice included firms looking at customer questions, complaints and behaviour to spot where promotions might confuse or mislead. They then use this evidence to rewrite wording, make messages clearer, and highlight key information.

Examples include updating risk warnings when customers seem confused, explaining eligibility more clearly, or simplifying emails that trigger repeated questions.

Testing promotions to confirm understanding

Good practice includes testing promotions with customers when there’s a risk they could misunderstand or lose out. Testing promotions checks whether people understand key risks, who is eligible and check important limits.

Examples include A/B testing different risk-warning designs, running short understanding surveys, and asking customers to explain the main message in their own words.

Clear approval and governance processes

Some firms use clear evidence-based approval steps, check for plain English and make sure risks and benefits are shown equally. They test promotions before release and keep clear records of how wording and decisions were agreed, with input from different teams.

One firm used readability checks, approved templates, rules for keeping risks prominent, and a documented sign-off process to stay consistent across all channels.

A firm tested its promotions with customers, and reworded sections that were confusing, making sure exclusions and key facts were clear before customers committed to the sales journey.

Smaller firms

A small firm showed good practice by keeping its financial promotions simple and easy to understand. Staff checked each promotion before publication to remove jargon, highlight key risks and make sure the main message was clear across mobile, email and web pages.

They paid close attention to customer questions and complaints. When they saw signs of confusion, they rewrote the wording or made important information more prominent. The firm also carried out basic testing by asking a few customers or colleagues to read the promotion and explain the message back, helping confirm it was not misleading. A straightforward approval process, supported by short checklists and clear signoff, meant decisions were recorded consistently without needing complex systems.

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Areas for improvement

• Overemphasis on benefits: Some firms highlighted offers upfront while hiding limits or risks, leading to customer misunderstanding.
• Limited or no consumer testing: Many firms relied only on compliance checks or sales data, without checking that customers understood the promotion. Real customer testing would help firms show they had tested consumer understanding.
• Inadequate monitoring of promotional outcomes: Some firms approved promotions without monitoring understanding, drop-off points or complaints. Without MI, firms may struggle to evidence that promotions support informed decisions.
• Unclear, inaccessible or unbalanced messaging: Dense language, cluttered layouts and inconsistent formatting made some promotions difficult to understand. Risk warnings were sometimes placed at the end of long mobile journeys or displayed in small or low contrast formats. A firm used attention-grabbing adverts that made the product look like an exclusive benefit, misleading customers and encouraging clicks. Promotions must be clear from the start about what they offer and should not steer customers through misleading design or behavioural tricks.

Firms should make sure risks are presented as clearly as the benefits and features. For example, avoiding advertising headline rates without making clear they are subject to further checks or individual circumstances. To meet Duty expectations, firms should also make sure promotional content is clear, balanced, and tested, with ongoing refinement informed by insight and customer outcomes.

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9. Governance and oversight

Good practice

Clear senior responsibility

Good practice included firms assigning explicit responsibility for consumer understanding to the relevant level of seniority. These individuals monitor MI, review customer evidence, assess the impact of communication changes, and make decisions grounded in data rather than assumptions. These firms are also adaptable in their approach and have consumer understanding at the forefront of decision making across their organisations.

Good practice means keeping clear records of decision making, regularly reviewing customer feedback, and following this up through agreed actions. Strong ownership of the consumer understanding outcome helps make sure communication standards stay consistent, embedded across teams, and maintained over time.

Effective governance structures

The firms that had effective governance brought together the right functions including product, operations, customer service, risk, and compliance to review insights, escalate risks, and track outcomes across all products and channels. These firms also had clear terms of reference, structured agendas, and well documented outputs and follow-up items.

Some firms also had designated committees and working groups for the Duty. They met regularly to review evidence, track key performance indicators (KPIs), and made sure issues were escalated promptly while ensuring a cohesive approach across their organisations.

Embedding consumer understanding into everyday processes

Many firms embed consumer understanding into their routine operations rather than treating it as a standalone compliance task. They review customer interactions regularly, update communications over time, and retest changes to make sure improvements are effective and long-lasting. Some other examples of strong governance included training staff to help customers understand information clearly, such as running short surveys or reviewing call transcripts to identify confusion and then update wording. Firms also introduced simplified escalation processes, so staff could raise issues about unclear or confusing communications without delay.

Smaller firms

Small firms do not need complicated systems to show they are managing things well. They can demonstrate good governance simply by keeping clear notes of what decisions they make, checking regularly that those decisions are still working, and using straightforward logs to track what actions were taken and why. This kind of record keeping helps show that issues are identified, decisions are followed through, and improvements aren’t forgotten over time.

For example, a small firm put a single senior compliance lead in charge of consumer-understanding work. This meant there was a clear point of contact responsible for escalating issues, and a simple structure for making and recording decisions. It is a practical model that smaller firms can replicate where appropriate without needing large committees or complex processes.

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Areas for improvement

Our review identified several areas where firms need to strengthen their governance and oversight of the consumer understanding outcome. Some firms still rely on approaches that are inconsistent or not well joined up. This makes it harder to be confident that customer communications are helping people make informed decisions. The themes below summarise the main areas for improvement.

• Unclear accountability: Some firms do not have a clear picture of who is responsible for decisions, or how those decisions are made. Accountability is often unclear, and in some cases, decisions are taken without using meaningful data or evidence. It was also not always obvious who was responsible for the consumer understanding outcome.
• Lack of checks for different types of customers: We did not see much evidence that all firms check their monitoring or testing results separately for different types of customers, including vulnerable ones. This means senior decision makers may only see overall data, which can hide differences in how well different groups understand the information.
• Weak feedback loop: Across several firms, monitoring was described but there was no clear evidence of a process to feed this information back into governance or to use it to improve communications. This shows firms were checking information but not consistently acting on what they learned, which falls short of what is expected under the Duty. Firms must not only monitor but also act on what the monitoring reveals.
• Limited use of MI in decision-making: Insufficient use of MI to inform decisions or identify risks. Firms could look to ensure governance committees receive comprehension driven KPIs, not just compliance, sentiment or activity metrics. To meet Duty expectations, firms should consider demonstrating structured, evidence driven governance that supports ongoing improvements in customer understanding. Strong governance and oversight make sure communication remains clear, accessible, and effective across all journeys and customer groups.

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