Product and business development teams at retail banks operating under the Consumer Duty are increasingly using AI to validate fair-value rationales for new-product approvals, draft target-market-statement language for product-governance files, and prepare go-to-market briefings that map customer-outcome design choices to PRIN 2A.4. The work product feeds directly into the bank's product-governance approval packs and the post-launch monitoring evidence the supervisor reviews.
Two frontier AI models tested by the RLB Specialist Panel produced 5 substantive failures on this regulation under audit conditions. The failure classes recorded are: Inference Drift on the Foreseeable-Harm Safe Harbour, Confused Guidance with Rule on Consumer Testing, Inference Drift on Fair Value Quantification Expectation, Inference Drift on Required Depth of Non-Monetary Analysis, Reversed the PRIN 2A Group-Insurance Exclusion. Questions were prepared by the RLB Specialist Panel based on real practical AI usage in the workflows the respective audience uses AI for, and each finding is bound to verbatim regulator-issued source text held as primary substrate.
The Consumer Duty (PS22/9 introducing Principle 12 and PRIN 2A, in force for open products from 31 July 2023 and for closed products from 31 July 2024) is the central retail-conduct regime the FCA now uses to grade firm behaviour, and the failure modes seen here all land inside the day-to-day work product that retail-banking product and business-development teams sign off on.
For retail-banking product and business-development teams, the operational consequence is direct. Product-governance approval packs, target-market statements, and post-launch monitoring evidence all rest on accurate fair-value and PRIN 2A.4 framing. A defect imported from AI work product surfaces on product-board re-review or thematic supervision, and the product function carries the launch-risk exposure.
Citation IDs for the findings in this brief: RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q003-Opus47, RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q007-Sonnet46, RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q008-Opus47, RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q008-Sonnet46, RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q018-Opus47. Each citation links to the per-finding record, the AI subject answer, and the regulator-issued substrate excerpt the answer was tested against. The RLB Specialist Panel maintains an audit-traceable record of which model produced which answer, against which substrate passage, and the binding is what makes the finding referenceable in firm work product and in supervisory correspondence.
The findings below are the ones that retail-banking product and business-development teams working under the Consumer Duty are most likely to encounter in the AI tools they already use, and the briefing sections that follow read each finding against the regulator-issued text.
This is the consolidated view of findings. Click the Citation IDs or 'see details →' on any item for the full details for each finding.
Retail Banking product and business-development teams designing retail journeys need to align customer-risk framing with PRIN 2A.2's actual single-test safe harbour. The model's multi-factor framing would, if adopted in a product-design brief, build a customer-warning standard the FCA has not asked for and add cost to product approvals with no compliance benefit.
Retail Banking product and business-development teams need to know whether consumer-testing of communications is a binding rule or a recommended methodology. The model's elevation of FG22/5 guidance into a rule under PRIN 2A.5.10R, if adopted in product-design specs, locks the team into testing programmes the FCA recommends but does not require.
Retail Banking product and business-development teams designing fair-value assessment templates for new retail products need to keep the methodology aligned with FG22/5's qualitative-only standard. The model's reversal would inflate fair-value template length and approval-cycle time without any regulatory benefit.
Retail Banking product and business-development teams should not adopt 'substantiated comparisons' into the fair-value template; FG22/5 is explicit that qualitative assessment is sufficient. The product team that builds the higher bar will see new product launches delayed.
Retail Banking product and business-development teams designing distribution arrangements that touch group insurance products need the PRIN 2A.1.8R carve-out preserved. The model's reversal would, if imported into a product-distribution memo, lead the team to apply Duty obligations across excluded activities.
Every finding on this page compares an AI subject's account of the rule against the regulator's verbatim text from the regulator's own portal. Both are linked. Each delta, its root causes, and impact analysis are documented and published with immutable Citation IDs.