A man studies a sheet of paper. A woman stands behind him with her hand on his shoulder.
Financial products and services shape some of the most important decisions we all make – from saving and borrowing, to protecting ourselves and our families when things go wrong.
Consumer needs vary widely, and there’s no such thing as a standard consumer. Our Financial Lives[2] data shows a huge spread of needs, resilience and capability. That’s why it’s so important for firms to design their products effectively.
When firms have consumers’ needs firmly in mind, they can support good outcomes – helping people make informed choices, get fair value, and receive the support they need over time to navigate their financial lives.
The cost of poorly designed products
But when product design falls short, the consequences can be serious. Firms might sell products to the wrong people, deliver poor value, or fail to adapt when customers’ circumstances change. And if they don’t monitor how their products are working in practice, they leave consumers exposed to avoidable harm – particularly people in vulnerable circumstances.
That’s why we’ve reviewed[3] how firms are designing, monitoring and distributing products and services under the Consumer Duty[4]. We looked at the foundations that matter most:
- Getting product design right from the outset.
- Keeping products under review.
- Taking responsibility for outcomes where products are sold or distributed by third parties.
What we found: progress, but more to do
Overall, we found encouraging signs of progress. Many firms are strengthening their product governance, monitoring outcomes better, and taking more ownership of what happens after they sell a product. These changes help ensure products and services continue to meet consumers’ needs, and that firms can spot and deal with problems earlier.
We found examples where even small changes made a big difference to people, like:
- A firm providing appliance insurance temporarily providing mini fridges for customers to store medication.
- A banking firm cutting complaints about ATM withdrawals by 45% in three months by making its app information clearer and improving staff training.
- A firm reducing the risk of financial abuse by creating a special debit card to help caregivers buy essentials for their dependents without needing access to their original card and PIN.
However, we also found inconsistency. While some firms are embedding these approaches well, others have more to do.
Product and service design and target markets
We saw good examples of firms taking a more disciplined and consumer‑focused approach to product and service design. Stronger practices included:
- Starting product development or review by researching customers’ needs, characteristics and behaviours.
- Translating this insight into clearer, more granular target markets.
- Embedding product governance into business‑as‑usual decision‑making, with clear ownership and challenge – rather than treating it as a one‑off compliance exercise.
In the strongest cases, firms could clearly explain who a product was for and what their needs were, and how the firms had met those needs in their product features, pricing and service delivery.
But some firms still relied on broad or generic target markets. This made it harder to assess products’ suitability for different groups of consumers, or identify where they weren’t working as intended.
Monitoring and review
We saw some of the most tangible improvements in the way firms monitor consumer outcomes. Many firms now use a wider range of management information, including complaints data, customer feedback and behavioural indicators like usage patterns or early cancellations.
Good practice involved firms not only collecting this data, but using it to identify emerging risks and take action to improve products, services or customer journeys. Where this worked well, firms were better placed to prevent harm instead of responding to it after the fact.
However, not all firms had this link between monitoring and action. In weaker examples, firms struggled to show how they escalated their insight, challenged them through governance, or used them to improve outcomes – particularly for different groups of customers.
Distribution and third‑party oversight
We also saw progress in how firms oversee products and services across distribution chains. Good practice included setting clear expectations for distributors, sharing relevant information, and testing whether third parties were selling and servicing products as intended.
But gaps remain. Some firms had limited visibility over what happened once products were distributed through third parties, increasing the risk that poor outcomes could go unnoticed for longer.
Supporting firms to deliver better outcomes
This insight is intended to help firms learn from each other and build on what’s already working. The examples of good practice show that there’s no single way to deliver good outcomes; firms should apply the Duty in a way that is proportionate to their size, role and customer base. We’ve included examples from smaller firms to reflect this flexibility.
Ultimately, better product design supports consumers and helps firms build trust, resilience and long‑term value. When firms design products around real consumer needs, the result is simple: better outcomes for people, and stronger, more sustainable businesses.
Firms should use these findings to reflect on their own products and services and identify where they should make improvements.