Bite-size: FCA Annual Report 2025/26 - what it means for firms

Consumer Duty, governance and data remain at the centre of the FCA's supervisory approach

The FCA has published its annual report and accounts 2025/26, setting out the work completed over the past year and the priorities that will guide the regulator over the next five years. 

There are few surprises for firms in the consumer credit sector. The report reinforces the themes that have featured throughout recent FCA publications and supervisory activity. Consumer Duty remains the foundation of the regulator's approach supported by greater use of data, closer scrutiny of governance and continued attention on motor finance, operational resilience and financial crime. 

One of the clearest messages is that the FCA increasingly views Consumer Duty as the mechanism through which good consumer outcomes should be delivered. Rather than introducing new detailed rules wherever possible the regulator expects firms to demonstrate that they understand customer outcomes, identify problems early and take action where improvements are needed. 

The report points to better use of customer data, board reporting and management information across many firms. The FCA expects boards to use this information to challenge performance, review fair value, monitor vulnerable customers and assess whether products and services continue to meet customers' needs. 

Motor finance remains one of the FCA's largest areas of supervisory work. The report reflects the considerable resources committed to the commission review and redress scheme and confirms that the issue continues to be a major priority. Although the Tribunal proceedings have delayed the scheme, the FCA makes clear that its focus on the sector remains unchanged. 

Another theme running throughout the report is the FCA's increasing use of data and technology. The regulator is investing heavily in artificial intelligence, data analytics and earlier identification of consumer harm. Firms should expect supervision to rely increasingly on evidence drawn from customer outcomes, complaints, product performance, pricing reviews and management information rather than periodic supervisory meetings alone. 

The report also highlights the FCA's continued focus on governance and culture. Boards and senior managers are expected to play an active role in overseeing customer outcomes, with Consumer Duty board reports continuing to be viewed as an important management tool rather than simply a regulatory requirement. 

Alongside consumer protection, the FCA confirms that financial crime, operational resilience and cyber resilience remain key areas of supervisory attention. The report also highlights the success of the FCA's Firm Checker tool, which has been used more than 1.9 million times since its launch and is helping consumers identify authorised firms and avoid scams. 

Running through the report is the FCA's wider objective of supporting economic growth while maintaining consumer protection. The regulator says it will continue looking for opportunities to simplify regulation, improve authorisation processes and use technology more effectively without reducing standards. 

Much of this reflects the areas where Auxillias is currently supporting clients. Across motor, asset and consumer finance, we are helping firms strengthen Consumer Duty frameworks, enhance board reporting and governance arrangements, review fair value assessments, support vulnerable customer strategies, respond to regulatory change and prepare for increasing FCA scrutiny. We are also seeing growing demand for support around operational resilience, financial crime controls, remediation programmes and the effective use of management information to demonstrate good customer outcomes. As the FCA continues to focus on these themes, firms should ensure they can evidence not only compliance, but also effective oversight and decision-making. 

Key takeaway

The Annual Report does not introduce major new policy changes. It confirms the FCA's direction of travel. Consumer Duty, governance, fair value, vulnerable customers, data-led supervision and financial crime remain high on the regulator's agenda. Firms should expect supervisors to continue asking for clear evidence that governance arrangements are working and that customer outcomes are being monitored and acted upon. 

For many firms, the challenge is no longer understanding the requirements but demonstrating that they are embedded throughout the business. The FCA's report reinforces the importance of robust governance, meaningful management information and clear evidence of good customer outcomes.