As consumer credit undergoes a significant transformation, compliance teams stand at the forefront of a pivotal decade. The Consumer Duty is no longer simply a regulatory framework or a tick-boxing exercise, it is becoming the guiding principle shaping the strategy, culture and technological direction of credit firms.
According to recent FCA insights, 84% of UK adults used some form of credit in the past year, not just for discretionary spending but increasingly to meet essential needs such as food, rent and transport. In addition, 5% of adults remain trapped in persistent credit card debt, while 21% reported going into an overdraft. These are clear signals that credit is functioning as a lifeline rather than a financial tool for many individuals.
These figures highlight a growing responsibility: when credit becomes a necessity rather than a choice, firms must act with heightened care. Under Consumer Duty, recognising when credit is not the appropriate solution is as important as responsible underwriting. Signposting to debt advice, benefit checks and income optimisation services must be deeply integrated into lending journeys. For compliance functions, this represents a shift from transactional monitoring towards holistic consumer outcome oversight, ensuring that fair value includes preventing unsuitable or harmful borrowing.
Over the past decade, regulatory action has already reshaped the consumer credit market. Since 2014, price caps on high-cost credit have saved consumers an estimated £150 million annually. Accountability has been strengthened through the implementation of Consumer Duty and Senior Managers and Certification Regime (SM&CR). While these measures have reduced harmful practices, they have also contributed to the exit of high-cost lenders exit the market, raising concerns over access for financially vulnerable consumers.
Compliance professionals must now guide firms to balance consumer protection with financial inclusion. This includes advocating for simple product design, transparent communication and affordability assessments that do not unfairly disadvantage those with imperfect credit histories.
Technology will be a decisive enabler in meeting these expectations. While digital lending has increased access to credit, the Consumer Duty requires firms to repurpose these same tools to detect early signs of vulnerability, identify financial distress and deliver compassionate interventions. Initiatives such as the 2024 Financial Inclusion Tech Sprint, where a signposting toolkit was developed to support declined applicants, illustrate how innovation aligned with regulatory intent can deliver meaningful support beyond the loan decision stage. Compliance teams should encourage such partnerships, ensuring innovation is used to scale protection, not just scale lending.
Key Lessons
- Credit is not always the right solution – Signposting consumers to appropriate financial support may result in better outcomes.
- Technology is a double-edged sword – It can expand access to credit but must also be used to identify and address financial stress at an early stage.
- Collaboration drives better outcomes – Cross-sector partnerships, such as the 2024 Tech Sprint, are proving essential in expanding responsible support mechanisms.
- The Consumer Duty sets a new standard – Outcomes must take precedence over processes, and genuine care must replace mere compliance. The role of compliance is evolving, from enforcer to strategic partner, ensuring that every new product, process and technology initiative is assessed against one core principle: Does it build trust, resilience and fairness into the consumer credit journey?
Future Priorities for the Next Decade
- Meaningful innovation – Credit products must be simple, transparent and genuinely useful.
- Enhanced support for vulnerable customers – Compassionate responses to financial hardship are non-negotiable. Delivering good client outcomes must remain a central priority for firms.
- Fair access to suitable credit – Firms must strike the right balance between accessibility and consumer protection standards.
How Complyport Can Help?
Complyport can support your firm in meeting these evolving Consumer Duty expectations through:
- Regulatory Guidance – Expert insight on how FCA expectations apply and upcoming regulatory trends.
- Ongoing Compliance Support – Continuous guidance to keep your firm aligned as regulation evolves.
- Compliance Documentation – Reviewing and updating policies, including drafting new procedures for credit advice under Consumer Duty.
- Training and Education – Tailored training to embed best practices and empower teams to deliver compliant, consumer-centric outcomes.
Contact us today to book a meeting with one of our Subject Matter Experts and ensure your firm is ready to lead with integrity in the evolving credit landscape.
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