On 18 December 2018, the FCA published its final report into retail banking business models, following on from its progress report in June 2018 (our blog is here).

The FCA states that its analysis confirms that the personal current account (PCA) is an important source of competitive advantage for major banks. PCAs bring cheap funding from customer deposits and additional revenues from overdraft fees and other charges.

As a result of the review the FCA will be initiating work in 3 areas: payment services, SME banking and monitoring of retail banking business models. In addition, it has identified 3 potential areas which may require co-ordinated action in the future to ensure a retail banking sector that works well for consumers: (i) continued access to banking services; (ii) the appropriate use of consumer data; and (iii) system resilience and effective prevention of financial crime and fraud.