As we move into 2026, it is clear that 2025 was a defining year for retail financial services. During the year, the FCA sharpened its supervisory expectations across insurance, mortgage lending and consumer credit, driven by persistent cost-of-living pressures, the expansion of digital distribution, and increasingly complex consumer vulnerabilities. For firms operating in these sectors, the regulatory agenda has become more assertive, more data-driven and more outcome-focused. Below, we outline the key developments that firms should be factoring into their 2026 planning.
Consumer Duty Drives Deeper Scrutiny of Retail Product Design
Throughout 2025, the FCA moved decisively from Consumer Duty implementation to active, outcomes-based supervision. The regulator increasingly sought clear evidence that firms are not merely complying with rules, but genuinely improving customer outcomes.
- Insurance: Supervisory attention focused on product value, claims outcomes and pricing fairness, particularly in add-ons, GAP insurance and protection products.
- Mortgages: There was heightened scrutiny of the fair treatment of customers in payment difficulty and the suitability of support options offered.
- Consumer Credit: Affordability checks, product structure, cost transparency and patterns of repeat borrowing came under increased review.
Across all sectors, the FCA’s expectation is clear: firms must be able to demonstrate robust, data-backed evidence that products deliver value throughout the customer lifecycle.
Vulnerability and Forbearance Expectations Continue to Strengthen
Ongoing economic pressures kept consumer vulnerability firmly on the regulatory agenda throughout 2025.
The FCA reinforced expectations for timely, tailored and proactive support for customers in financial difficulty, with particular emphasis on mortgages and higher-cost credit.
In insurance, supervision focused on ensuring claims processes are accessible and that communications — especially at renewal — are clear, fair and supportive for vulnerable customers.
Within consumer credit, the regulator reiterated the importance of affordability, harm prevention and customer understanding, including increased scrutiny of so-called “credit-builder” tools designed to support financial education.
For firms entering 2026, early identification of vulnerability, adaptable customer journeys and demonstrable positive outcomes remain essential supervisory expectations.
Pricing, Fair Value and Distribution Under Sustained Review
The FCA maintained close scrutiny of how products are priced, distributed and positioned across markets.
- General Insurance: Ongoing post-reform reviews examined premium movements, commission structures and intermediary arrangements.
- Consumer Credit: Attention centred on product features that could obscure total costs or contribute to persistent debt.
- Mortgages: Transparency around switching processes, reversion rates and the boundary between advised and execution-only sales remained key areas of focus.
Across all sectors, the FCA continued to pursue an overarching objective: fair value for consumers, regardless of distribution channel or commercial model.
Financial Crime and Fraud Safeguards Advance
Against a backdrop of rising fraud risk, the FCA intensified its expectations around firms’ financial crime frameworks during 2025.
In mortgages and consumer credit, the regulator highlighted the need for stronger controls around identity verification, application fraud and ongoing behavioural monitoring.
Within insurance, key supervisory themes included claims fraud detection, oversight of delegated authorities and the robustness of financial crime controls across extended distribution chains.
The FCA’s public messaging consistently emphasised the importance of effective data, analytics and governance in detecting and preventing financial crime — priorities that remain firmly in place as 2026 begins.
Data, Digital Channels and AI Governance Come Further Into Focus
Digital transformation continued to reshape retail financial markets, attracting increased regulatory attention.
Automated decision-making in mortgage and credit affordability assessments was a particular area of focus, with expectations around transparency, explainability and appropriate human oversight.
In insurance, supervisory interest extended to digital claims handling, algorithmic pricing and the fairness of data-driven underwriting models.
Across all sectors, the FCA encouraged firms to improve data quality, strengthen cyber resilience and ensure AI-driven tools do not disadvantage vulnerable or digitally excluded customers. Increasingly, firms must demonstrate not just innovation, but the governance structures that ensure technology remains fair, controlled and reliable.
How Cosegic Can Help
For insurers, mortgage lenders, brokers and consumer credit providers, the FCA’s supervisory approach throughout 2025 reinforced the primacy of fairness, transparency and real-world outcomes. Consumer Duty is now embedded into day-to-day supervision, expectations around vulnerability and forbearance have strengthened, and scrutiny of pricing, distribution and financial crime frameworks has intensified. At the same time, the rapid growth of digital channels and AI has placed data governance and model oversight firmly in the spotlight.
Cosegic works with firms across insurance, mortgages and consumer credit to help them respond confidently to these evolving expectations. We support clients at every stage — from interpreting regulatory change and embedding Consumer Duty, through to reviewing product governance, vulnerability frameworks, pricing and fair value assessments, financial crime controls and the oversight of digital and data-driven models. Alongside our advisory support, firms can use My Cosegic, our technology platform, to help track regulatory developments, manage compliance activity and maintain clear oversight of governance, risk and regulatory obligations.
As 2026 gets underway, the regulatory direction of travel remains clear and consistent: higher standards, stronger evidence and more proactive risk management. Firms that invest early in governance, data capability and customer-centric design will be best placed to meet FCA expectations. Cosegic partners with firms to deliver practical, proportionate and regulator-ready solutions that help them navigate this landscape with confidence.
If you would like to discuss how these developments may impact your firm or how My Cosegic can support a more structured, efficient approach to compliance please get in touch to explore how Cosegic can help.
