Bank customers losing out on £70 a year

22 October 2015

banks We spoke about the CMA investigating the banks earlier in the week, and now, the Competition and Markets Authority have published some of their findings.

One of the big things is that customers could save an average of £70 a year if they switch their account to another provider. It was thought that the regulator might start breaking the banks up too, but they haven't gone for it on this occasion.

The CMA did conclude, however, that the current market is resolutely not working competitively. They think that too many customers have stayed with their bank for more than 10 years, which shows we're not prone to moving to better deals when they're out there.

57% have been with their bank for more than 10 years, with 37% sticking with their provider for more than 20 years.

Another thing that the CMA are not happy with, are complex charges. They suggest that banks should be required to prompt customers to switch when certain things happen - such as their local branch closing, or if overdraft charges change. They should also make it even easier for people to switch accounts, and that their should be a new price comparison website for small businesses.

The CMA pointed out that those who regularly go into the red could be saving £260 per year by switching accounts, and they'd like to see more effort made so that customers are aware of the fact that they can move between banks and products. They said in their report that people are still put-off switching their current account because they think it would be "complicated, time-consuming, and risky".

"Despite some encouraging developments, particularly in the shape of challengers that have entered the market in recent years, for too long banks have been able to sit back and take their existing customers for granted," said Alasdair Smith, head of the retail banking investigation for the CMA.

"We don't think that customers will truly benefit from a more competitive marketplace until they can compare accounts more easily and feel confident that they can switch without risk," he said.

The CMA's final report will be published in May 2016

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