The Regulator Has Spoken: Why Consumer Duty and the FCA's Open Finance Roadmap Demand Better Affordability Data

In the space of six weeks this spring, the Financial Conduct Authority published two documents that, read together, send an unmistakeable signal to every mortgage lender and broker in the UK: the era of "we do our best to assess affordability" is ending. The era of "here is the evidence that our assessments produce good outcomes" has begun.

On 14 April 2026, the FCA published its Open Finance Roadmap, naming mortgage affordability as one of just two priority use cases for its programme, alongside SME lending. A month earlier, in March 2026, the FCA's first annual Mortgage Regulatory Priorities report told firms in plain terms that "having policies, controls and governance on paper is no longer sufficient." The regulator expects evidence. It expects data. And it expects demonstrable oversight.

For firms that have already invested in real-time transaction data and open banking-powered affordability tools, this regulatory direction of travel is a competitive tailwind. For those still relying on payslips, bank statement printouts, and customer self-declaration, the compliance gap is widening by the quarter.

What the FCA actually said in spring 2026

The March 2026 Mortgage Regulatory Priorities report replaced the FCA's old portfolio letters with a single annual document. The message on affordability was pointed. The regulator signalled that firms must actively monitor whether their approaches "remain appropriate and continue to deliver good consumer outcomes" and crucially must be able to demonstrate this in practice. The recurring refrain: outcomes, data and demonstrable oversight matter.

The April 2026 Open Finance Roadmap went further. It set out how open finance will give lenders access to "a more complete, real-time view of a borrower's financial position, including income patterns, spending behaviour and existing liabilities" to make affordability assessments "far more accurate." The roadmap confirmed that between November 2025 and February 2026, participating firms had already tested AI-enhanced affordability assessment tools and reusable data packages for loan applications through the FCA's Smart Data Accelerator TechSprints. A formal discussion paper on the first open finance scheme, covering mortgages and SME credit, is expected in Q4 2026.

Underpinning all of this is Consumer Duty, now fully in force for legacy as well as new products. The Duty requires firms not just to have processes but to show, with evidence, that those processes produce genuinely good outcomes for real customers. Statistical proxies and self-declared income figures are not that evidence.

"Having policies, controls and governance on paper is no longer sufficient. Outcomes, data and demonstrable oversight matter."

— FCA Mortgage Regulatory Priorities, March 2026

The compliance gap nobody wants to talk about

Research by Equifax, published alongside its Affordability 360 product launch in November 2024, found that 24% of lending organisations still rely solely on a customer's self-declaration to assess their expenditure. A further 16% use statistical estimates from the Office for National Statistics; data designed to approximate average households, not individual borrowers.

Under Consumer Duty, this approach carries real risk. The Duty requires firms to demonstrate that each customer has received an outcome appropriate to their individual circumstances. A customer whose declared expenditure significantly understates their actual outgoings, whether through error, optimism or misunderstanding, is a customer whose affordability has not been genuinely assessed. If that loan later becomes unaffordable, the FCA will ask what data underpinned the decision.

The FCA's second charge mortgage review, published in early 2026, found that "some lenders' expenditure assessments relied on assumptions that did not appear realistic to the customer base." That finding was aimed at the second charge market; but the principle applies across residential lending. Assumptions are not evidence.

The commercial case is equally compelling

Regulatory compliance and commercial performance are, in this case, pulling in the same direction. The evidence on the ROI of open banking-powered affordability is growing. Equifax's analysis of approximately 30,000 applicants who completed an open banking journey found a 29% uplift in lender approvals for customers who had previously been declined or marginalised on affordability grounds. These are not high-risk borrowers being pushed through; they are creditworthy customers whose true financial picture was obscured by the limitations of traditional assessment.

Separately, industry data suggests that brokers using open banking tools for client onboarding are reporting time savings of around 40% for the affordability fact-find stage, with the process taking minutes rather than days. The elimination of "please send three months' bank statements" from the client journey is not a minor improvement: it reduces abandonment rates, improves client satisfaction, and frees broker time for advice rather than administration.

On the lending side, the FCA's March 2025 clarification of the interest rate stress test rule, confirming that lenders can design their stress test to reflect whether a customer is likely to receive a new deal, has already unlocked an estimated £30,000 in additional lending per typical application. Eighty-five per cent of the market has now updated its approach. Better affordability data amplifies this: when a lender can demonstrate that a borrower's true disposable income supports a higher loan, the commercial case for precision assessment becomes compelling.

What good affordability data looks like under Consumer Duty

• Real-time transaction analysis — not self-declared or estimated income and expenditure
• Categorised expenditure data (housing, childcare, subscriptions, debt servicing) rather than a single outgoings figure
• Lender-ready reports with a clear audit trail — so you can show the FCA exactly what data underpinned each decision
• API integration into existing CRM or DIP workflows — removing friction for brokers without a large IT project
• Transparent methodology — so compliance teams and underwriters understand how scores are derived

Consumer Duty applies to every firm: not just the big six

One misconception persists in the market: that sophisticated affordability infrastructure is the preserve of Barclays, Nationwide, and the HSBC mortgage operations of this world. Consumer Duty does not distinguish by firm size. A regional building society with a £500 million mortgage book and a directly authorised broker principal with 200 clients face identical evidencing requirements under the Duty.

The challenge for smaller lenders and intermediaries is that most open banking SaaS has historically been built, priced, and scoped for large institutions. Integration projects that a major bank's technology team can absorb in a sprint cycle become multi-month undertakings for a firm without a dedicated engineering resource.

This is the gap that is opening in the market. The FCA is raising the evidence bar. The technology to meet it exists. But the technology has not yet been made genuinely accessible to the firms that arguably need it most.

How Moxim addresses this

Moxim is a SaaS affordability layer designed specifically for the lenders and brokers who do not have the luxury of a large technology team. It connects via API to existing workflows; no large IT project, no long implementation timeline. It delivers categorised transaction analysis and affordability scoring, outputting lender-ready reports that give underwriters and compliance teams the documented evidence Consumer Duty requires. The methodology is transparent; lenders and brokers understand precisely how the affordability picture is constructed. The outputs are designed to slot into existing DIP and underwriting processes rather than replace them.

Moxim is currently onboarding its first lender and broker partners. For firms looking to close the compliance gap now, before the FCA's Q4 2026 open finance consultation raises the bar further, the timing is right to have the conversation, and the cost of starting that conversation now is considerably lower than the cost of a supervisory finding later.

Moxim collates a client's income, spending, credit, identity and property data into a clean affordability assessment the moment they share access — removing manual data entry and document chasing from case prep. We are currently onboarding pilot broker partners.

Ready to close the compliance gap? Join the broker pilot →

What this looks like in an FCA file review

Picture two brokers, each recommending the same mortgage product to a client with variable freelance income. The first has a file containing a signed income declaration and three months of PDF bank statements the client emailed over, with no record of how the figures were checked, who checked them, or against what benchmark. The second has a categorised, timestamped export showing twelve months of verified income and spending, with the affordability calculation traceable back to the underlying transactions.

If either loan later runs into difficulty and the FCA asks to see the file, only one of those brokers can show, rather than assert, that the recommendation reflected the customer's actual financial position. Consumer Duty does not require firms to predict every downstream outcome; it requires them to evidence that the outcome was reasonably foreseeable given what they knew, and knew properly, at the point of sale. That is the practical difference open banking data makes to a compliance file, not just a lending decision.

This is not a hypothetical scenario. The FCA has already published findings from its second charge mortgage review criticising firms whose expenditure assumptions did not reflect real customer circumstances, and the regulator has been explicit that the same scrutiny extends to first charge residential lending. A firm that waits for a thematic review to discover its evidence gap is choosing a materially worse moment to close it than a firm that closes the gap now, while the Open Finance Roadmap consultation is still open and before the Q4 2026 discussion paper sets a harder deadline.

Sources

1. FCA, "Mortgages Regulatory Priorities", March 2026.
2. FCA, Open Finance Roadmap, 14 April 2026. Reported by Open Banking Expo, The Intermediary, and Mortgage Soup.
3. FCA, Smart Data Accelerator TechSprints on Mortgages and SME Lending, November 2025 – February 2026.
4. FCA, Policy Statement PS25/11 (Mortgage Rule Review: First steps), 22 July 2025.
5. FCA, Second Charge Mortgage Review supervisory findings, 2026 (reported March 2026).
6. Equifax UK, "Affordability 360" product launch and supporting research, November 2024. 29% approval uplift statistic based on analysis of c.30,000 applicants. Reported by FStech, Open Banking Expo, and fintech.global.
7. Equifax / Bud Financial industry data: 24% of organisations rely on self-declaration for expenditure assessment; 16% use ONS statistical estimates. Equifax affordability research, 2024.
8. Bud Financial / industry data: ~40% time savings for applicants using open banking channel for affordability fact-find. Reported by thisisbud.com, "Open Banking for Affordability: The 4 Key Stats People Ask."
9. FCA, Stress test clarification statement, March 2025: 85% market adoption, ~£30,000 additional lending per typical application unlocked.
10. TCC Group, "FCA Mortgage Regulatory Priorities: Next steps for lenders", 23 April 2026.