How to write a Consumer Duty board report in 2026

What the FCA now expects, and why readability data alone will not meet the standard

Introduction

What this article covers: the FCA's published expectations for the 2026 board report cycle, what previous reports got wrong, and how to evidence the Consumer Understanding Outcome to the standard the regulator now demands.

Each year, regulated firms covered by the Financial Conduct Authority's (FCA) Consumer Duty must produce an annual board report. As the Duty has matured from initial implementation into business as usual, the FCA's expectations of both compliance and reporting quality have risen sharply.

The FCA has now reviewed nearly 260 Consumer Duty board reports across the first two reporting cycles and published comprehensive findings in February 2026. Compliance teams can no longer claim uncertainty about what good looks like. The regulator has stated its expectations explicitly. This article converts those official findings into a practical guide for writing your 2026 report.

For background on the Consumer Duty framework itself, see our guide: What is the FCA Consumer Duty? For a deeper explanation of the Consumer Understanding Outcome, see Intelligibility vs readability: what the FCA actually requires.

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The deadline and why this report matters

The annual board report deadline, 31 July 2026 for most firms, is the single most important Consumer Duty document the FCA examines during supervisory dialogue. It serves as the firm's formal articulation of how it has assessed performance against each of the four outcomes, what gaps exist, and what remedial actions have been taken or planned.

The board report is not a compliance checkbox. The FCA has made clear that subsequent supervisory activity will specifically assess whether firms have addressed the weaknesses identified in earlier review cycles. Firms that produce superficial reports, or that replicate last year's document with minor amendments, face direct regulatory risk.

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What the FCA found lacking in previous cycles

Source: FCA: Consumer Duty board reports: good practice and areas for improvement (February 2026). Review of 180 first-year and 80 second-year reports.

The February 2026 review identified consistent weaknesses across both reporting cycles. The most significant findings were:

Insufficient data quality: many reports contained high-level assertions without underlying evidence. Boards lacked the data needed to form genuine assurance that the firm was meeting its obligations.
Missing customer segmentation: data was aggregated too broadly to identify specific harms. Distinct customer groups, including those with characteristics of vulnerability, were frequently omitted entirely.
Weak evidence on vulnerable customers: firms failed to demonstrate that vulnerable customers were achieving outcomes at least as good as other customers. Assumptions replaced evidence.
No genuine board challenge: many reports showed no evidence of effective challenge from the governing body. Board minutes frequently revealed that reports were approved without substantive discussion. The FCA stated clearly that governing bodies must not act as a rubber stamp.
Readability used as a proxy for understanding: compliance directors continued to report Flesch-Kincaid or similar scores as evidence of the Consumer Understanding Outcome. The FCA has explicitly rejected this approach (see section below).

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FCA

"Some firms did not have sufficient data quality to justify conclusions or to give governing bodies adequate assurance that firms are meeting their obligations under the Duty. Boards must push for analysis that goes beyond MI dashboards and provides insights." FCA, Year 2 Consumer Duty Board Reports review, April 2026

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Characteristics of a compliant board report

The FCA's review also identified what strong reports do differently. Compliant reports share the following characteristics:

Comprehensive MI frameworks: integrating multiple qualitative and quantitative data points: testing regimes, complaints data, Net Promoter Scores (NPS), Financial Ombudsman Service (FOS) data, product performance metrics, and direct customer research.
Genuine identification of weakness: good reports openly identify operational gaps and compliance shortfalls. They do not present an unqualified picture of success.
Credible remediation plans: where issues are identified, compliant reports present time-bound action plans with clear ownership and measurable effectiveness criteria.
Evidenced board challenge: board minutes document substantive discussion of the report's findings, not merely approval. Directors ask searching questions; compliance teams respond with data.

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Comparing reporting behaviours: deficient vs compliant

The table below maps the FCA's published findings to specific reporting behaviours. Use it to benchmark your current approach before drafting your 2026 report.

Evaluation Area	Deficient Behaviour	Compliant Behaviour
Data sources	Single metrics or anecdotal case studies	Multiple sources: testing, complaints, NPS, FOS, and product performance data
Customer segmentation	All retail customers aggregated together	Separated by customer characteristics including vulnerability
Vulnerable customers	Assuming standard processes protect everyone equally	Testing specific outcomes for vulnerable customer groups with separate MI
Intelligibility evidence	Flesch-Kincaid readability scores used as proxy for understanding	Intelligibility testing showing comprehension levels by audience segment, aligned to FCA standards
Remediation plans	Vague promises to improve processes later	Credible, time-bound action plans with clear ownership and effectiveness measures
Board governance	Report approved rapidly with no documented discussion	Active board challenge and debate documented in meeting minutes

The Consumer Understanding Outcome: why readability scores are not enough

This is the area the FCA flags most frequently in supervisory dialogue. Most firms are still getting it wrong.

The Consumer Understanding Outcome requires firms to ensure their communications equip consumers to make effective, timely decisions. It is not a plain language standard. It is an evidence standard: firms must test whether their communications are genuinely understood by their intended audience, and maintain records of that testing.

Readability scores, such as Flesch-Kincaid, Gunning Fog, or SMOG, measure surface-level features of text: word length, sentence length, and syllable count. They do not measure whether a reader can extract meaning, make a decision, or act on the information. A document can achieve an excellent readability score and still confuse a reader entirely.

The FCA has been explicit: "Readability scores alone usually overlook complexity." Boards that receive only readability data as evidence of the Consumer Understanding Outcome are not receiving adequate assurance. The FCA's supervisory questions increasingly probe what testing was carried out before communications were sent, and whether it can demonstrate genuine comprehension, not just legibility.

For a full explanation of the distinction between readability and intelligibility in law and regulation, see our article: Intelligibility vs readability - what regulated firms need to know.

KEY DEFINITION

Intelligibility is the quality of communication that ensures readers can understand the meaning, consequences, and context of information, and can act on it. It is distinct from readability, which measures ease of reading without assessing comprehension. The FCA's Consumer Understanding Outcome requires intelligibility evidence, not readability scores.

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How Amplifi delivers intelligibility evidence for board reports

Compliance teams cannot generate true intelligibility evidence using legacy readability software. The Amplifi platform solves this specific regulatory challenge by generating objective intelligibility evidence in a format designed for board-level consumption, and in a format the FCA knows and has tested directly.

Amplifi moves beyond readability scores to measure the statistical likelihood that a specific audience will understand a communication. The platform provides:

Intelligibility Risk Scores for each document, mapped to UK educational attainment and population reach
Segmented comprehension data showing outcomes across different consumer groups, including vulnerable customers
Identification of the specific language, conceptual, or structural issues reducing intelligibility - not just a headline score
Alignment of pre-sending intelligibility testing with the Amplifi Multi-Level Comprehension Framework, used by the FCA in its own research, and with downstream outcomes data (complaints, defaults, call centre contacts)
FCA Consumer Duty compliance reports in downloadable PDF format, ready for board-level presentation

Amplifi was accepted onto the FCA AI Marketplace in 2025 and has participated in FCA Sandbox testing of consumer disclosure communications. The Amplifi Comprehension Framework was cited in FCA Consultation Paper CP25/17. This is not vendor positioning; it is a direct regulatory validation of the methodology behind Amplifi's intelligibility scoring.

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Regulatory framework: the rules that govern the board report

The board report must be grounded in the specific FCA Handbook rules below. Each section of the report should trace its conclusions back to these obligations.

Handbook Rule	Core Requirement	Responsibility
PRIN 2A.8.3 R	Prepare a report setting out the results of consumer outcomes monitoring and any evidence of poor outcomes	Compliance and risk teams
PRIN 2A.8.4 R	The governing body must review and approve the report at least annually	Governing body and board
PRIN 2A.8.4 R	Confirm the firm complies with its obligations under Principle 12	Governing body and board
PRIN 2A.8.5 R	Agree actions to address any identified risks of poor consumer outcomes	Governing body and board

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Core questions the board must answer before sign-off

The FCA expects the board to ask searching questions of compliance teams before approving the report. These are not administrative questions; they require substantive evidential answers.

Outcome	Key questions the board must ask
Products and services	Do your products perform as intended for the target market? What evidence supports this conclusion?
Price and value	Do your products carry prices that reflect their true value? Is any pricing causing consumer harm?
Consumer understanding	Are customers equipped to make timely, informed decisions? What intelligibility testing was carried out before communications were sent? Does your evidence go beyond readability scores?
Consumer support	Can customers access support without unnecessary friction? Are wait times, resolution rates, and accessibility evidenced in MI?
Vulnerable customers	Do your communications produce equivalent understanding outcomes for vulnerable customer groups? Is this evidenced separately in the data?

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Section-by-section report structure: a 2026 checklist

Use this structure as the framework for your 2026 board report. Each section maps directly to the FCA's published requirements under PRIN 2A.8.

1. Executive summary

Clear overview of report scope and purpose
High-level findings for each of the four outcomes
Definitive conclusion on whether the firm meets its obligations under Principle 12
Summary of second line and third line assurance activities
Overview of key risks identified and mitigation strategies in place

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2. Outcomes monitoring report

Dedicated sections for each in-scope product or service
RAG ratings backed by quantitative data metrics, not assertions
Qualitative commentary providing context for MI data
Pre-sending intelligibility testing (e.g. Amplifi) aligned with post-engagement comprehension testing (e.g. the Amplifi Multi-Level Comprehension Framework) and downstream outcomes data (complaints, defaults, call centre data)
Root cause analysis for any identified poor outcomes
Separate evidence of outcomes for vulnerable customer groups, not aggregated with general population data
Summary of information sharing across the distribution chain

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3. Business strategy report

Confirmation that current business strategy delivers good outcomes
Assessment of whether future strategy remains consistent with Principle 12
Material escalations sent to the Executive Committee
Data gaps identified with clear plans to resolve them
Assessment of how revenue growth plans impact the firm's conduct risk profile

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4. Culture report

Evidence that customer interests sit at the centre of firm culture
Evaluation of how remuneration and incentive structures drive good outcomes
Evidence of training programme impact on staff behaviours
Evidence that staff feel empowered to raise compliance concerns safely

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5. Second line of defence and compliance report

Compliance testing approach and rating methodology summarised
Results of conduct risk appetite metrics
Any differences between first line and second line ratings highlighted and explained
Key escalation points sent to risk committees
Internal audit findings relating to the Consumer Duty

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6. Intended future enhancements

Lessons learned during the current reporting cycle
Plans to automate MI and data collection
Specific enhancements for vulnerable customer support systems
Action plans resulting from third-party recommendations

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7. Board challenge and approval

Board agreement with the report findings documented
Qualitative commentary showing substantive challenge, not just sign-off
Tracker of compliance queries raised by directors
Signed board minutes confirming holistic discussion took place
Final summary statement with date of approval

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Conclusion

The third annual Consumer Duty board report cycle demands a materially higher standard of analysis than earlier cycles. Firms can no longer rely on superficial compliance assertions, broad MI dashboards, or readability scores to evidence the Consumer Understanding Outcome.

The FCA expects granular data, genuine intelligibility evidence segmented by customer group, credible remediation plans, and demonstrable board challenge. These are not aspirational standards, they are operational requirements with supervisory consequences when firms fall short.

To explore how Amplifi can generate the intelligibility evidence your board report requires, visit amplified.global/product or contact the team.

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How to write a Consumer Duty board report in 2026