The Financial Conduct Authority (FCA) has taken its first action under Consumer Duty, requesting fair value assessments from nine banks.
This action came amid concerns that interest rate rises were not being passed to customers and their savings accounts.
The introduction of Consumer Duty in July 2023 now means that firms are required to ensure the products and services across their range deliver fair value to their customers.
The FCA will analyse the information provided by the banks and is expected to publish an update later this Autumn.
Andrew Gething, managing director of MorganAsh, 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.”
He added: “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.”
