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 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 how firms are designing, monitoring and distributing products and services under the Consumer Duty. 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.
Facts Only
* Financial products shape decisions regarding saving, borrowing, and risk protection.
* Consumer needs vary widely; there is no standard consumer profile.
* Poor product design can lead to selling products to the wrong people or delivering poor value.
* Failure to monitor products in practice leaves consumers exposed to avoidable harm, particularly vulnerable people.
* Progress was found in strengthening product governance, monitoring outcomes, and taking responsibility for third-party distribution.
* Examples of positive impact include providing appliance insurance options for medication storage.
* A banking firm reduced ATM withdrawal complaints by 45% through clearer app information and staff training.
* A firm reduced the risk of financial abuse by creating special debit cards for caregivers.
* Good practice involves researching customer needs, defining granular target markets, and embedding governance into daily decisions.
* Firms must use monitoring data to identify risks and take action rather than just reacting to outcomes.
Executive Summary
Financial products impact major consumer decisions, including saving, borrowing, and risk protection. The variability in consumer needs necessitates effective product design to ensure informed choices and fair value delivery. When product design fails, firms risk misaligning products with customer needs and exposing consumers to harm, especially those in vulnerable circumstances.
Progress has been made under the Consumer Duty through efforts in product design, review, and accountability for third-party distribution. Specific examples of positive outcomes include providing necessary items like mini fridges for medication storage, reducing ATM withdrawal complaints via clearer app information, and creating specialized debit cards to prevent financial abuse for caregivers.
Despite these advances, inconsistency remains across firms regarding how effectively they apply these principles. Some firms successfully integrated consumer needs into design by deeply researching customer behavior and embedding governance, while others relied on generic market segments. Monitoring outcomes has shown tangible improvements when data was actively used to prompt action, but gaps persist in linking monitoring insights directly to corrective governance or improved outcomes for diverse customer groups.
Full Take
The narrative pivots on the tension between the potential for systemic harm resulting from poorly designed financial products and the measured progress achieved through regulatory frameworks like the Consumer Duty. The central pattern reveals a gap between declarative intentions (designing around needs) and operational execution (consistent application of governance across diverse firm sizes).
A key implication is that mere compliance or superficial adoption of new structures is insufficient; true resilience requires embedding deep, dynamic accountability into the core decision-making processes. The examples of success—like providing tangible solutions to specific vulnerabilities—suggest that value creation occurs at the intersection of design and practical support. Conversely, the inconsistency in monitoring demonstrates that the mechanism for realizing this potential is highly variable, depending on internal organizational capacity rather than just external mandates.
The pattern suggests that systemic improvement depends not just on setting standards, but on creating flexible pathways for implementation, recognizing that the approach must be proportionate to the firm's context. The focus shifts from simply identifying 'what works' to understanding the infrastructural barriers preventing all firms from achieving unified, high-fidelity outcomes for every segment of their consumer base.
Bridge Questions: What specific governance mechanisms are most effective at ensuring real-time linkage between monitoring data and necessary operational changes across varied organizational scales? How can industry create standardized metrics that allow smaller firms to effectively apply principles demonstrated by larger entities without sacrificing localized contextual relevance? What historical precedents exist for successful, scalable implementation of consumer-centric design when organizational priorities conflict with short-term performance incentives?
Sentinel — Human
This analysis presents as a well-structured piece of industry commentary, likely derived from deep review of specific regulatory reports, demonstrating strong analytical synthesis rather than purely generative output.