RS do not shop around for the best interest rate, sticking instead with their current account provider, the City watchdog said yesterday.
If few savers look out for good deals it means new challenger banks will find it hard to get a foothold in the market, the Financial Conduct Authority (FCA) warned.
And if they cannot raise funds through savings deposits, it will be tough for the new banks to grow and take on the bigger lenders.
“In this market, there is a minority of very active, very engaged consumers who regularly change provider to get the best deal,” said the FCA’s Christopher Woolard.
“We want to look more closely at what is inhibiting the majority of consumers from getting better deals. If the regulator decides to take action in the market, it could force banks to give clearer information on how interest rates change over time, and push lenders to make it easier to switch between accounts.”