UK insurance and financial planning firms are producing more confident, data-rich Consumer Duty board reports, but most still cannot demonstrate that those reports translate into proven improvements in customer outcomes, according to a new report from the Chartered Insurance Institute.
The report, titled "Consumer Duty Board reporting: two years on - from reporting to proving outcomes," follows the CII's third annual roundtable discussion on the subject, held in July 2026. It draws on input from insurance, financial planning, compliance, customer insight and professional standards representatives, as well as officials from the Financial Conduct Authority.
The FCA published its own observations on the first two years of Consumer Duty board reporting in April 2026. According to governance advisory firm Lumorus, which analysed the FCA's findings, second-year reports showed stronger governance and clearer board oversight, though the regulator said further progress was needed to make reporting genuinely outcome-focused.
According to the CII, roughly three-quarters of firms cited difficulties integrating data, sourcing appropriate data and connecting datasets across their organisations. The professional body said that challenges tied to unfamiliarity with regulatory expectations have eased since the Duty came into force, but structural and practical problems persist.
Firms are also struggling to evidence consumer understanding. The CII found that processes for responding once a misunderstanding has already been identified are far more developed than mechanisms for detecting misunderstanding in the first place. Participants said firms need better testing at key decision points, clearer outcome measures and a more joined-up approach to customer behaviour data.
Independent research published by consultancy Square4 this year points to the scale of that gap. The consultancy's Consumer Duty in 2026 research, produced with YouGov across an 8,000-consumer dataset, found a persistent confidence gap between what firms believe they are delivering and what consumers report actually experiencing. Square4 also found that firms which had invested in governance and board reporting were not necessarily the firms whose customers reported the best outcomes - with insurers running complex distribution chains and thin direct customer contact appearing most exposed to that mismatch.
That last finding is directly relevant to brokers. Firms operating through intermediated distribution channels face particular scrutiny under Consumer Duty because the regulator expects them to understand and evidence outcomes even where direct customer contact is limited. For brokers, that means the outcome-evidencing gap identified by the CII and Square4 is not solely an insurer problem - it sits across the distribution chain.
Advisory commentary on the 2026 reporting cycle reflects a similar trajectory. FD Capital, a corporate finance advisory firm, noted in a May 2026 analysis that the bar for board reports has been raised substantially since the Duty's first cycle in 2024, with the FCA now holding comparative data across multiple reporting years.
At the July 2026 roundtable, the FCA reinforced messaging on shifting board reports away from being treated as compliance exercises and toward being used as governance tools that drive continuous improvement, according to the CII.
Proportionality for smaller firms was a further theme at the roundtable. Participants said smaller businesses can be closer to their clients and better placed to investigate individual customer outcomes, but often lack the scale, internal distance or research resources needed to test understanding and evidence outcomes in the way larger organisations can.
"The real test of Consumer Duty board reporting is whether firms can use the evidence to understand where customers are experiencing poor outcomes and take meaningful action to improve them," said Adam Harper, executive director of strategy, advocacy and professional standards at the CII, noting the CII would build on the roundtable's findings with further practical guidance to support the sector.
The CII said it has committed to continued engagement with members, firms and the regulator to develop sector-specific support, with a focus on helping firms treat Consumer Duty reporting as a tool for ongoing improvement rather than a one-off compliance task.
