FCA: MS14/2: Cash savings market study: interim report

The FCA observes that a lack of switching by customers, combined with the high proportion of savings balances held by personal current account providers, makes it very difficult for “challenger banks" to gain market share and attract balances at a similar cost to the larger providers. The FCA will now undertake further research before taking a view on whether it should intervene to ensure competition is working in the interests of consumers.

As well as considering the feedback to its initial findings, the FCA will look at the extent to which it might be able to promote greater consumer engagement, including: what could be done to ensure that more consumers are aware of the rates they receive and the rates on offer on other accounts; what information customers are given when rates are changing; whether it is possible to give consumers greater insight into how their interest rate is likely to evolve over time, especially after any introductory offer ends, so that they can make an informed medium-term choice between providers when opening an account; what could be done to make it easier to move savings to a new provider and whether other interventions may be necessary to improve outcomes for customers overall.

The final report into cash savings will be published in late 2014.

Read the press release here.