The Financial Conduct Authority (FCA) is set to analyse the information that nine banks and building societies have provided to ensure the savings products that they are offering are fair value.

The assessment follows the introduction of the Consumer Duty at the end of July, which requires firms to ensure that the products and services that they are offering deliver fair value and act if they do not.

The FCA outlined a 14-point action plan to ensure people can access a competitive savings market, with an update on progress expected in the autumn.

As a result of this plan, the FCA has seen a greater availability of higher interest rates in both term limited and easy access accounts. Moves have also been made by some savings providers to align the rates available on accounts currently on sale and those now closed.

Head of active savings at Hargreaves Lansdown, Mark Hicks, said: “The large high street banks have been getting away with not passing on interest rates to their customers for too long – relying too heavily on customer apathy. On the face of it, it looks like this could drive change, but it could still be too easy for the high street banks to continue to offer poor rates to the majority of their clients, as their high-paying easy access accounts are often capped at very low amounts.

“So, unless this point gets addressed, whilst it is positive to see the FCA taking the next step in analysing the fair value of banks and building societies savings rates, the danger is it’s unlikely we will see any fundamental change for the majority of customers.”

Managing director at MorganAsh, Andrew Gething, said: “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.”

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