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Balance needed on driving savings competition

Balance needed on driving savings competition

Karim Haji, Head of Banking, KPMG UK responds to the FCA’s discussion paper on introducing a basic savings rate in the cash savings market.

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Karim Haji

Responding to the FCA’s discussion paper on introducing a basic savings rate in the cash savings market, Karim Haji, Head of Banking, KPMG UK says:

“Customer inertia remains one of the strongest forces in banking. At a time when a fifth of families spend over 60% of their income on pay day, it is right that the regulator looks at what more can be done to help consumers make the most of their money.

“There is however a balance to be made here, the sector will want to make sure enough time is allowed to let past actions play out. Open banking is still in its infancy and whilst it hasn’t had the desired effect yet, as consumers become increasingly comfortable with the idea, its potential is huge. We have to remember that there was a time when people were afraid to shop online, but today the high street is fighting for survival.

“Further, we are braced for an interest rate rise which in itself will be good news for savers. That said, increases will be minimal and take a while to filter through to savings so it is understandable that the FCA isn’t relying on interest rates alone to boost rates. If a basic savings rate is introduced, the regulator would no doubt be keeping a keen eye to make sure the basic rate doesn’t become the go-to rate, even as interest rates rise.” 

 

-ENDS- 

 

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About KPMG in the UK

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such. 

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