The Competition and Markets Authority (CMA) has published its provisional decision on remedies following its retail banking market investigation. The CMA outlines a wide-ranging package of proposals to tackle the issues hindering competition in personal current accounts (PCA) and in banking services for small and medium-sized enterprises (SMEs).

The cross-industry Open Banking Working Group led by HM Treasury set out a way forward on how to deliver open application programming interfaces (APIs) in its report in February 2016. The CMA states that these recommendations now need to be translated into action, so that customers can benefit from greater choice and competition. The CMA states that open APIs are central to its package of remedies and proposes to use its powers to require the largest banks to work together to deliver open APIs. The CMA also wants to ensure that the project is effectively managed and does not want to get bogged down in debates  between market participants. To this end, it is proposing the creation of a new entity, funded by the banks but with an independent chair, to ensure the timely delivery of this remedy.

The CMA also proposes to:

  • push the development of new online comparison tools and improve the current account switch service to make switching banks more straightforward and give customers more awareness of, and confidence in the process. This way, the CMA believes banks will provide their customers with the right information so that they can easily find out which provider and type of account offers best value for them;
  • include new measures targeted at overdrafts, with a particular focus on users of unarranged overdrafts;
  • require PCA providers to alert their customers when they start using an unarranged overdraft; and
  • build a strong package of measures to deliver better banking services to SMEs. By making the prices and availability of lending products more transparent, the majority of SMEs will not need to turn directly to their existing bank for finance without considering other offers.

The CMA invites written submissions on its proposals by 7 June 2016.

The CMA will publish its final report on the retail market investigation by 12 August 2016.

View CMA provisional decision on remedies in retail banking investigation, 17 May 2016