Competition Inquiry for UK banks
The Competition and Markets Authority proposed the investigation in summer, and have now vowed that they're going to look at the difficulties customers face when they want to switch banks. One of the things they're concerned about is the lack of smaller competitors to the big banks on the High Street.
Barclays aren't happy, saying that this probe is "not appropriate at this time", adding: "Various developments, innovations and stimuli are changing the competitive landscape in in relation to both [personal current accounts] and [small and medium enterprises] banking, and these must be given time to mature."
The BBA - they represents the banking sector - aren't phased at all, saying that the industry would co-operate because: "Banks are pro-competition - they compete for business every day."
The CMA will be looking at these things concerning bank services in the UK.
- Very few customers switching banks or shopping around for the best rate
- A lack of transparency and difficulties in comparing services from different banks
- The hurdles faced by smaller banks trying to enter the market
- The continued dominance of the "big four" banks
We should have some answers from the inquiry in around 18 months time and the CMA added that it would review the 2002 report by its predecessor, the Competition Commission, to see if their findings are relevant to the state the banks are in, and to their own investigations.