Peter Tyler, Director, Conduct and Savings Policy, UK Finance
One of the key banking sector reforms over recent years has been the strengthening of protection for retail customers under the Financial Services Compensation Scheme (FSCS). It now protects deposits up to £85,000 per person, per authorised deposit-taking institution, which means around 98% of retail deposits are covered in full.
The FSCS is free for customers to use and aims to pay back deposits within 7 days in the event of a bank, building society or credit union failure. This has had a direct impact on public confidence: FSCS data shows 82% of consumers said they felt reassured knowing FSCS exists, while 62% said they trust banks and building societies knowing that FSCS would protect them if they fail. But there’s more to do to ensure that customers are aware of how industry and the FSCS work together, and what protections are available to them.
Banks and building societies already display FSCS stickers and posters in branch and to a limited extent online, in line with regulation, but have now committed to go further to raise awareness of the scheme.
Under a new voluntary agreement, starting this week, UK Finance, the Building Societies Association and the FSCS have agreed a package of measures for retail customers’ savings and current accounts, including:
- Publishing the FSCS badge on relevant website pages, i.e. product homepage and login page where customers go to view their cash account.
- Incorporate the badge at least once in a prominent place in the customer journey on mobile banking apps.
- Adding the badge as standard to the standard FSCS information sheet presented to customers at account opening.
The agreement will underpin consistent use of the FSCS badge by banks and building societies across the most effective points in customer journeys to promote FSCS protection.
Firms have up to 18 months to implement the agreement in full and will be subject to FSCS mystery shopping.
Ten years on from the financial crisis, this is a vital step in ensuring that depositors understand that their money is protected, and we will continue to support the FSCS in building awareness of the scheme.