Individuals who receive poor interest rates on their savings accounts could be sent text or email alerts notifying them of better deals, under a proposal put forward by the Financial Conduct Authority (FCA).
The plan, termed the ‘Sunlight Remedy’, aims to expose poor savings rates: new FCA research revealed that some savers have been receiving an annual return of just 0.01%.
This means that those with £1,000 to invest are potentially earning as little as 10p a year.
As a part of the plan to combat these low rates, the FCA trialled sending consumers text alerts and email reminders, which proved to have a positive effect on prompting them to switch accounts to receive a better interest rate.
As a result of these trials, the FCA intends to consider the idea in greater detail in the forthcoming months.
Christopher Woolard, director of strategy and competition at the FCA, commented: ‘In a well-functioning market, providers should be competing to offer the best possible deal to consumers.
‘Our Sunlight Remedy data shows that some consumers could be better off by opening a different account.’