UK banks paying lower rates to established customers - regulator
LONDON (Reuters) - Britain's biggest banks are getting away with paying lower interest rates to customers that have stayed with the same savings account for years because many consumers do not shop around, the country's financial regulator said on Tuesday.
The Financial Conduct Authority said that Britain's biggest personal current account providers still attract a large proportion of the country's deposits despite on average offering lower rates than smaller competitors.
Lawmakers are concerned about the dominance of Britain's biggest five banks - Lloyds, RBS, HSBC, Barclays and Santander UK - which handle more than three-quarters of personal current accounts.
The regulator is calling for views from the industry following the publication of an interim report into the effectiveness of competition in the cash savings market.
Chris Woolard, the FCA's Director of Policy, Risk and Research, said the regulator's initial view was that competition did not appear to be working in the interest of many consumers.
"In this market there is a minority of very active, very engaged consumers who regularly change provider to get the best deal. We want to look more closely at what is inhibiting the majority of customers from getting better deals," he said.
The FCA said it would undertake further research before deciding whether it should intervene. It will look at what can be done to ensure consumers are aware of the rates they receive and what is on offer elsewhere.
(Reporting by Matt Scuffham; editing by Jason Neely)
