The Competition and Markets Authority (CMA) has published its final report following its investigation into the retail banking market.
In summary the CMA states: “We found that older and larger banks do not have to work hard enough to win and retain customers, so it’s difficult for new and smaller banks to grow. Our proposals include changes to help consumers and microbusinesses find a better deal and the quicker adoption of open banking.”
The key measures that the CMA will be implementing:
- requiring banks to implement ‘Open Banking’ by early 2018. Open Banking will enable personal customers and small businesses to share their data securely with other banks and with third parties, enabling them to manage their accounts with multiple providers through a single digital ‘app’, to take more control of their funds and to compare products on the basis of their own requirements;
- requiring banks to publish objective information on quality of service on their websites and in branches, so customers can see how their own bank shapes up. Whether a personal customer or small business is willing to recommend their bank to friends, family and colleagues will be a core measure, but the CMA will also be requiring banks to publish and make available through Open Banking a range of other quality measures; and
- requiring banks to send out suitable periodic and event-based ‘prompts’ such as on the closure of a local branch or an increase in charges.
Underpinning these remedies, the CMA is introducing further measures to make it easier for customers to search and switch. Specific measures are also being introduced to benefit unarranged overdraft users.
View Retail banking market investigation: overview, 9 August 2016
View CMA paves the way for Open Banking revolution, 9 August 2016