This consultation raises questions that go beyond annual reporting. Sam Coe, Partner at Thistle, explores the broader operational considerations firms may need to address.
CP26/3 is being positioned as an annual return. It is much more than that. It signals a structural shift in how the FCA supervises retail banking business models. It is a direct test of whether firms genuinely understand their product economics, can evidence them clearly, and can defend them under scrutiny. For many firms, the issue will not be a lack of data, but inconsistency in how this is operationalised.
- Different product taxonomies across Finance and Risk.
- Allocation methodologies embedded in spreadsheets.
- MI that does not fully reconcile to the financial statements.
- Governance that works in practice but cannot always be evidenced clearly.
When CP26/3 becomes mandatory, those weaknesses stop being inefficiencies. They become regulatory risk. This is where Change and Transformation capability becomes critical.
This Is Not a Reporting Exercise. It is an Operating Model Shift.
If CP26/3 is treated tactically, firms will likely experience:
- Heavy manual intervention each year
- Reconciliation firefighting
- Board discomfort around attestations
- A parallel process that never truly embeds
If treated strategically, it becomes an opportunity to build a durable product framework that supports:
- Pricing discipline
- Capital optimisation
- Consumer Duty monitoring
- Future regulatory change
The right question is not “How do we submit this return?” It is “Do we have a repeatable, controlled, cross-functional operating model for product profitability?” Answering that requires coordinated change across Finance, Risk, Product, Data and Compliance. It requires design, governance and structured implementation.
The Consumer Duty Link is Critical
Consumer Duty already requires firms to demonstrate fair value and good customer outcomes.
You cannot evidence fair value without a credible, defensible product profitability analysis.
CP26/3 raises the bar further. It introduces subproduct granularity, clearer allocation logic, formal reconciliation back to P&L and capital metrics, and stronger governance expectations.
Firms that approached Consumer Duty as a documentation exercise will likely find themselves exposed.
Firms that embedded robust outcome monitoring will be significantly better positioned.
Operationally, these agendas should not run in silos
A unified framework covering product taxonomy, profitability methodology, MI controls and governance can support:
* CP26/3 compliance
* Ongoing Consumer Duty evidence
* Future FCA thematic reviews
* Wider pricing and strategic decision-making
Done properly, this becomes a long-term protective capability, not a one-off compliance response.
How Thistle Initiatives' Change and Transformation Team Can Help
At Thistle, our C&T team focuses on delivery certainty, not just advice. For CP26/3 and related regulatory change, our approach typically includes:
Rapid Readiness Assessment
We review product and subproduct taxonomies, assess allocation methodologies, test MI reconciliation, and identify governance and control gaps.
Target Operating Model Design
We help establish a single cross-functional product taxonomy, document defensible profitability and allocation frameworks, clarify ownership across Finance, Risk and Product, and design reconciliation controls that are auditable and sustainable.
Implementation and Embedding
We map data flows across systems, build control frameworks, support dress rehearsal submissions, and ensure governance is board-ready and operationally embedded.
Independent Challenge and Assurance
We provide pre-submission dry runs, Consumer Duty alignment testing, and evidence pack preparation to support senior management confidence and regulatory engagement. Crucially, we do this as practitioners who understand both regulatory expectation and operational reality.
CP26/3 Is the Direction of Travel
Whether or not a firm falls within the initial scope, the supervisory direction is clear. Granular, repeatable and defensible product economics are becoming a baseline expectation.
Firms that act early will reduce regulatory risk, strengthen Consumer Duty evidence, improve pricing and capital discipline, and avoid rebuilding under time pressure later.
Firms that delay will likely have to implement the same capabilities eventually, just under greater pressure and scrutiny.
The smarter move is to design and embed the right operating model now and ensure it supports not only CP26/3, but the broader regulatory landscape ahead.
That is where a structured, delivery-led approach makes the difference. Get in touch if you would like an initial conversation.
Meet the Expert
Sam Coe, Partner 
Sam has 14 years’ experience leading large-scale change and transformation programmes in the Financial Services industry, working with several Tier 1 institutions across Banking, Insurance and Wealth and Asset Management (e.g. HSBC, Barclays, Aviva). Sam started his career at KPMG before moving to Capco in 2017, where he was part of the Banking and Payments Leadership Team. He has since spent time at Elixirr helping to grow the UK Financial Services vertical before joining Thistle.
He has led numerous Regulatory Change programmes, including remedial responses to S166, Consumer Duty and Operational Resilience. As well as this, he also has vast experience delivering pre and post-deal transformation programmes related to M&A activity, such as new target operating model design and implementation and post-merger integration. Other experience includes Digital Transformation and Operational Efficiency, where Sam has led programmes saving millions in cost for the organisation.