In its ongoing examination of firms in relation to TCF implementation, the regulator saw businesses placing a greater focus on happy customers than they were on fair treatment.
It also found that, to date, common themes were beginning to emerge from the firms it had assessed - mainly major retail groups, medium-sized firms and wholesale firms.
Whilst they had suffcient relevant TCF data in place, firms were not using it to actually measure whether they were treating their customers fairly.
They also had not thought through what these measures might tell them, or analysed the data it threw up.
Looking to the future, the regulator said that small firms could expect a simpler assessment process which would focus on their management approach, and how it impacted upon TCF progress.
However the regulator issued a warning that it would take a heavy hand with firms continuing to flout the rules.
It said: 'We have a range of regulatory tools at our disposal and in appropriate circumstances we will consider enforcement action.
'Should this be taken then, in line with the commitment set out in our Business Plan 2008/09, where we see evidence that standards are not improving despite clear messages to industry, we will seek to increase penalties to achieve our goals.'
Speaking at an FSA conference on Wednesday, FSA chief executive Hector Sants highlighted the continued importance of TCF in the face of market turbulence.
He said: "You should not seek to divert your attention away from focusing on conduct of business requirements and our high level principles.
"You should be preparing for this changed environment and you, and your customers, will need to recognise that there are both short and long-term risks, and think about the implications.
"In particular, you will need to continue the focus on treating customers fairly and to tackling areas of financial crime."
