Laura WilesEarly in July, the Treasury Committee progressed its campaign for banks to increase savings rates by issuing letters to FCA and the UK’s biggest high street lenders: Barclays, HSBC, Lloyds and Natwest. The banks and FCA have now published their responses to the Committee.
In particular, the Committee queried whether the banks believed all their savings rates provide ‘fair value’ to customers in light of the incoming Consumer Duty. To FCA, it asked how ‘fair value’ will be assessed, what action the regulator can take if firms do not comply with the Consumer Duty, and how it will judge whether banks are making enough effort to encourage savers to switch to higher rates.
In response, FCA confirms that it expects firms to ensure customers are “informed of available rates across their product set and how they may benefit from switching.”
The banks all said they were confident that their policies and products are consistent with the Consumer Duty.
The Committee states that if the high street banks continue to pay poor savings rates, they should ensure customers know that better rates are available. It took a hard line on the banks’ responses, saying that with the Government and regulators in agreement on the need for action, “the time for weak excuses is over”. The Committee also noted that it would continue to monitor the topic closely, especially when the banks publish their half year results in the upcoming weeks.
The Committee will hold an accountability hearing with FCA on 19 July 2023.