Evidencing compliance in a data-led regulatory world

What happened?

TCC ran a webinar on evidencing compliance, using three live polls to gauge industry sentiment. Asked how they felt about the evidence and reporting obligation, 42% of participants believed the regulatory environment was unlikely to change significantly in the near term, while a further 25% expected the Consumer Duty to keep increasing the burden, and 8% said they were uncertain what lies ahead.

A second poll on customer conversation recording found that while 17% of firms now review more than ten per cent of interactions, a significantly higher proportion than the historic norm, 30% still do not record every conversation, and many assess only a small fraction of the conversations they do capture.

A third poll on outcome testing found all respondents said they could verify vulnerability checks, and 82% felt confident demonstrating appropriate treatment and customer understanding. Yet only 53% reported that all their customer conversations were recorded, and only 41% could demonstrate the total absence of detriment across recent customer journeys.

Why does it matter?

The FCA’s shift from prescription to what it terms “principles with proof” places the responsibility for demonstrating good outcomes squarely on firms, using tools such as section 165 information requests and targeted data requests to build a detailed picture of real-world practice.

The poll results show a gap between the confidence firms have in their outcomes and the completeness of the evidence that would allow them to demonstrate this if asked. Record-keeping inconsistencies, missing audit trails and incomplete documentation continue to cause friction, particularly for standard activities such as annual reviews or vulnerability assessments.

Who is affected?

Compliance, risk and customer experience functions across wealth management, pensions, banking, lending, general insurance and protection, and motor finance are affected, particularly those relying on manual sampling to test customer outcomes.

Key risks

• Manual outcome testing that cannot review customer interactions at a statistically meaningful level.
• Incomplete recording of customer conversations, leaving gaps in the evidence base for fair value, understanding and treatment.
• Confidence in outcomes that is not backed by consistent, retrievable evidence across every customer journey.
• Limited use of post-interaction surveys, despite these being among the most reliable tools for capturing genuine customer comprehension.

Actions to take

1. Review how many customer conversations are currently recorded and assessed, and identify the gaps.
2. Use predictive AI to triage conversations and files at scale, so human reviewers can focus where they are genuinely needed.
3. Introduce post-interaction surveys where they are not already used, to capture genuine customer comprehension.
4. Build a consistent, retrievable evidence trail for vulnerability checks, fair value and customer understanding, rather than relying on periodic sampling.

Wider implications

Firms are entering a period where evidential readiness is a core operational capability, not just a regulatory expectation. Being able to demonstrate that the right conversations took place, that customers understood the information provided, and that good outcomes were achieved is becoming the standard the FCA expects, rather than simply avoiding harm.

Predictive AI is becoming central to this shift because, unlike generative tools, it is designed to find patterns, detect missing steps and surface potential issues across entire populations of interactions, enabling population-level insight without a dramatic increase in headcount.

Recommendations

Firms should invest now in technology, data quality and intelligent sampling techniques to move from low-volume sampling towards true population-level insight, turning good intentions into robust, easily retrievable evidence.

TCC’s regulatory experts can assess a firm’s current approach to evidencing outcomes, identify gaps and benchmark processes against best practice, while Recordsure’s technology can help analyse every interaction and build a robust evidential framework.