On 18 July 2023, the Financial Conduct Authority (FCA) and the Information Commissioner’s Office (ICO) wrote to UK Finance and the Building Societies Association to clarify that savings providers can inform their customers of the best rates available to them, even where they have objected to direct marketing.
The FCA and ICO confirm that firms can provide regulatory communications to all their savings customers that provide neutral, factual information about the interest rate and terms of the savings product they hold, the interest rate and terms of other available savings products, and what their options are for moving to another product. They note that data protection law (the UK GDPR and Data Protection Act 2018) and the Privacy and Electronic Communications Regulations 2003 do not stop firms from sending these regulatory communication messages. However, firms must still ensure that they comply with data protection requirements when using information about people.
The letter also reminds firms of their obligations under the FCA’s Consumer Duty, flagging in particular that to comply with the Duty they will need to make savings customers sitting on low rates aware of higher rate products the firm has that may better serve their financial objectives. They will also need to be able to show, through their testing and monitoring activity, that their engagement strategy is effective in practice and delivers good outcomes.
The joint letter builds on the ICO’s previous guidance and the FCA’s work to ensure savers get fair value. The FCA notes that, now it has provided this clarification, firms are expected to point customers to the best possible saving deals. The FCA will be paying close attention to firms’ engagement strategies to support their savings customers to achieve good outcomes and, at the end of July 2023, the FCA will report its updated view of how well the cash savings market is supporting customers.