PwC comments on the FCA’s action plan on cash savings as the Consumer Duty comes into force

Andrea Wintermantel, Financial Services partner at PwC UK, comments:

“This intervention on Day One of the Consumer Duty shows how seriously the FCA intends to supervise its new powers and embed Consumer Duty at the heart of its supervision strategy. This is a wake up call to firms that the FCA will have little patience for any who are not proactively complying with the Duty. 

“While consumers should shop around for the best deals, today’s announcement could mean improved savings rates for some in the coming months, including quicker pass on rates from base rate increases. Consumers may also find they receive more - or different - communications from firms, which should make it easier for them to access better rates.

“We may see some firms reviewing the profitability of their savings offerings and potentially withdrawing some products from the market, as a result of today’s announcement. Savings providers will need to review their customer communications and engagement strategies against these standards - additional proactive prompts are likely to be needed to meet the FCA’s expectations. Today’s update also marks the start of changes in the cadence of regulatory interventions, with firms having to respond very quickly to FCA interventions, and to meet specific desired outcomes that the FCA has set out. 

“Firms can expect similarly strong and early FCA interventions in other product areas, particularly where there is public or political scrutiny, significant consumer harm, or an impact on vulnerable customers.”