On 27 June 2018, the FCA published a progress report on its review of the retail banking sector. The review is an in-depth and wide-ranging piece of work to give the FCA a greater understanding of retail banks’ business models and how these may change in the future. The progress report sets out the progress made on the analysis of the issues and planned next steps.

Among other things the review has shown that most current account customers contribute to their banks’ profits but a small proportion pay significantly more than others. The FCA has also found that many consumers go to their current bank rather than shopping around when looking for other financial products.

FCA CEO, Andrew Bailey, said that the review “provides more evidence that there is no such thing as free banking. In particular, this evidence will inform the work we are doing on overdrafts, so we can fully understand the potential effects of the significant action we are considering taking in this market.”

The deadline for comments on the progress report is 7 September 2018.

The next stage of the review will involve the FCA looking at a range of possible future scenarios, including what branch closure programmes mean for consumers and banks’ business models, and how technological and regulatory changes may affect the market.