UK Financial Conduct Authority (FCA) to Analyse Savings Products Offered to Consumers

The UK Financial Conduct Authority (FCA) has announced it will analyze “lenders’ fair value assessments” to determine if they are providing consumers with appropriate savings products.

Earlier this year, the FCA commented on the spread between what banks receive in interest rate returns and what they give their deposit holders.  The regulator said that banks’ “decision-making has been slow” in adjusting rates. This subdued criticism reflected the fact that banks were earning a far higher rate on parked cash than what they were offering to consumers.

This past July, the FCA assumed a new statutory higher duty when it comes to “consumer protection.” As part of this new responsibility, it appears the FCA may be ready to do more about the anemic savings rates offered by some firms.

In a public statement, the FCA explained:

“Following concerns that not all savers are getting good deals, we required nine firms to provide us with their assessments of what value their savings products offer. This follows the introduction of the Consumer Duty in July, which requires firms to ensure the products and services across their range deliver fair value to their customers and act if they do not.

We will now analyse the information banks and building societies have provided. We will publish an update later this autumn, including any steps we might take if we identify areas of concern.  

In July, we outlined a 14-point action plan to ensure people can access a competitive savings market. We are making progress on each of these and will provide a separate update in the autumn.”

The FCA added that since the plan was published rates have improved. At the same time, the regulator said they “welcome the development of a more competitive market and encourage people to shop around for the best deal.”

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