What does FCA PS22/9 Consumer Duty say about AI in banking?

What are the key points of FCA PS22/9 Consumer Duty?

• Principle 12 (PRIN 2.1.1R): 'A firm must act to deliver good outcomes for retail customers.' PRIN 2A.1.17G says it imposes a higher and more exacting standard than Principles 6 and 7 for retail market business.
• Cross-cutting rules: PRIN 2A.2.1R act in good faith; PRIN 2A.2.8R avoid causing foreseeable harm; PRIN 2A.2.14R enable and support retail customers to pursue their financial objectives.
• Products and services outcome (PRIN 2A.3): manufacturers must maintain, operate and review a product approval process before marketing or distribution (PRIN 2A.3.2R).
• Price and value outcome (PRIN 2A.4): manufacturers must ensure products provide fair value to customers in the target market and carry out and regularly review a value assessment (PRIN 2A.4.2R).
• Consumer understanding (PRIN 2A.5) and consumer support (PRIN 2A.6): communications must meet customers' information needs and be likely to be understood (PRIN 2A.5.3R); support must meet the needs of customers, including those with characteristics of vulnerability (PRIN 2A.6.2R).
• Governance and monitoring: Principle 12 must be reflected in strategy, governance and incentives (PRIN 2A.8.1R); the governing body must review an annual report on customer outcomes and confirm compliance (PRIN 2A.8.3R, 2A.8.4R); firms must regularly monitor outcomes (PRIN 2A.9.8R).
• AI link: FG22/5 paragraph 5.12 lists 'using algorithms, including machine learning or artificial intelligence' in ways that embed or amplify bias and lead to systematically worse outcomes for some groups as an example of not acting in good faith, unless the difference can be justified objectively.
• June 2026: the FCA's CP26/23 'Consumer Duty – scope and proportionality' proposes changes to the Duty's scope and presentation, including a new chapter PRIN 3A; its consultation closed on 18 September 2026. These are proposals, not rules.

What did FCA PS22/9 Consumer Duty change for banks?

PS22/9 moved FCA conduct supervision of retail firms from process-based rules towards outcome testing: firms must be able to evidence good outcomes, not just follow procedures. For banks using AI in credit decisions, pricing, chatbots or collections, the Duty supplies the FCA's main conduct lens: the same Principle 12 standards apply regardless of technology, so a model that produces systematically worse outcomes for a customer group, or a chatbot customers cannot understand, is a Duty issue. The Duty is therefore a main conduct rulebook the FCA points to for AI in UK retail banking.

What does the FCA Consumer Duty require of banks, including when they use AI?

The FCA Consumer Duty, introduced by PS22/9 on 27 July 2022 and in force from 31 July 2023 (closed products 31 July 2024), requires a firm to 'act to deliver good outcomes for retail customers' (Principle 12) and sets detailed rules in PRIN 2A. Three cross-cutting rules require good faith (PRIN 2A.2.1R), avoidance of foreseeable harm (PRIN 2A.2.8R) and support for customers' financial objectives (PRIN 2A.2.14R), and four outcomes cover products and services, price and value, consumer understanding and consumer support. Firms must embed the Duty in governance, have the board review an annual outcomes report, and monitor the outcomes customers actually receive. The Duty is technology-neutral, so it applies to AI used in credit decisions, pricing, chatbots and collections; the FCA's AI Update says firms must consider their Consumer Duty obligations, and FG22/5 warns that AI embedding or amplifying bias may not be good faith.

The Duty is the FCA's main tool for conduct risk from AI. The FCA's AI Update (April 2024) says its approach to consumer protection, including the Consumer Duty, is particularly relevant to fairness in firms' use of AI, and gives examples: an AI risk assessment can leave some customers better off than others and exclude some from the market, while an AI chatbot can help customers understand products. PS22/9 itself contains no AI-specific rules; the Duty's general rules apply to AI.

In practice the Duty is evidenced through outcomes data. The monitoring rule in PRIN 2A.9.8R and the board reporting in PRIN 2A.8.3R and 2A.8.4R mean a bank deploying a credit or pricing model needs outcome metrics broken down by customer group, including customers with characteristics of vulnerability, and board-level challenge of the results. This sits beside the PRA's model-risk expectations in SS1/23, which govern how models are built and validated, and beside data-protection rules on automated decisions.

The FCA is reviewing the Duty. In June 2026 it published CP26/23 on the Duty's scope and proportionality, proposing among other things a new PRIN 3A chapter for scope rules; consultation closed on 18 September 2026 and no final rules have been confirmed at the date of this entry. Rule references in this entry are those made by PS22/9; firms should check the live Handbook for later amendments.

WHAT THIS MEANS IN PRACTICE

• Treat every customer-facing model and chatbot as in scope of Principle 12: record the intended customer outcome, the target market and the evidence that outcomes are good.
• Test AI-driven credit, pricing and collections for systematically worse outcomes for groups of customers and document any objective justification, using FG22/5 paragraph 5.12 as the benchmark for good faith.
• Include customers with characteristics of vulnerability in outcome monitoring, because PRIN 2A.6.2R support and PRIN 2A.9.8R monitoring both require it.
• Put AI-related outcome evidence into the annual board report under PRIN 2A.8.3R and 2A.8.4R so the board can confirm Duty compliance.
• Track CP26/23 and the live Handbook for scope and presentation changes (PRIN 3A) before relying on rule numbers in policies.