Risk teams at retail banks operating under the Consumer Duty are increasingly using AI to update foreseeable-harm matrices, draft fair-value risk assessments for product committees, and validate the bank's customer-outcome KPIs against the FCA's stated expectations. The work product feeds directly into the bank's Consumer Duty risk register and the executive-risk-committee dashboard the supervisor sees.
Two frontier AI models tested by the RLB Specialist Panel produced 4 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. 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 risk teams sign off on.
For retail-banking risk, the operational consequence is direct. The Consumer Duty risk register, the foreseeable-harm matrix, and the executive-risk-committee dashboard all rest on accurate PRIN 2A framing. A defect imported from AI work product surfaces in supervisor dashboard review or internal-audit, and the risk function carries the second-line 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. 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 risk 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 risk teams designing customer-journey risk-acceptance frameworks need a clean view of the PRIN 2A.2 safe harbour. The model's multi-condition reconstruction would, if adopted in a risk-control framework, set a defensive standard the rule does not require, and possibly distract from the actual reasonable-belief test the risk function should be evidencing.
Retail Banking risk teams monitoring consumer-understanding outcomes under PRIN 2A.5 need to know what the rule actually requires versus what FG22/5 recommends. The model's blurring of the two raises risk-monitoring scope without any underlying rule requirement.
Retail Banking risk teams reviewing fair-value assessment outputs need the qualitative-only standard preserved. The model's reversal would push the risk function to demand quantitative non-monetary analysis the FCA has expressly not required, creating internal disputes between risk, product, and compliance over a fabricated methodological standard.
Retail Banking risk teams reviewing fair-value assessment outputs should not treat 'substantiated comparisons' as the FCA's expectation; the regulator's standard is qualitative description. The risk function that adopts the higher bar will see fair-value sign-offs delayed without any regulatory benefit.
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.