"Today’s action by the FCA is an important reminder to all financial services that Consumer Duty is now live and firms are bound to meet its requirement"
In its first public intervention, the FCA has asked nine banks and building societies to provide value assessments on its saving products. It follows concerns that interest rate rises are not being passed to customers and their savings accounts. In July, the FCA issued a 14-point action plan to ensure banks are offering better savings rate deals.
Today, the FCA has asked 9 firms to provide it with their assessments of what value their savings products offer.
The assessment follows the introduction of the Consumer Duty in July 2023, which requires firms to ensure the products and services across their range deliver fair value to their customers and act if they do not.
The FCA says it will analyse the information banks and building societies have provided and publish an update later this autumn, including any steps it might take if it identifies areas of concern.
The regulator will also provide a separate update on its 14-point action plan this autumn. The FCA says since the plan was published, it has seen greater availability of higher interest rates in both term limited and easy access accounts and moves by some savings providers to align the rates available on accounts currently on sale and those now closed.
Andrew Gething, managing director of MorganAsh, commented: “Where there may still be those questioning the new regulation, today’s action by the FCA is an important reminder to all financial services that Consumer Duty is now live and firms are bound to meet its requirements - or face investigation. As the base rate has continued to rise, the spotlight has remained on savings and the rates being offered by both banks and lenders.
“As part of the overarching goal to deliver good outcomes to consumers, ensuring fair value is an important component. This spans much further than just making sure savings deals represent fair value, requiring firms to support the financial resilience of its customers by informing them when higher rates are available. The FCA itself says the pace of firms to act on this has been slow, highlighting the clear need for the regulator to step in.
“As with all areas of Consumer Duty, communication and good data remains fundamental. Whether it’s for fair value assessments, management information for reporting or vulnerability assessments, a consistent approach to gathering and sharing data is key to forming a clear picture of the value of a product or service, and the customer experience.”