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Uswitch comments on CMA retail banking investigation final report

Commenting on the publication of the Competition and Markets Authority’s final report following its investigation into the retail banking market, Richard Neudegg, head of regulation at Uswitch.com, says: “Despite the development of a straightforward to use switching service, switching in the current account market has remained stubbornly low, with more than half of current account customers staying with the same bank for more than ten years.

“It is encouraging to see the Competition and Markets Authority (CMA) pushing the banks to modernise systems and harness new technology to inject some much needed innovation into the market. This should lead to the development of services which truly help consumers better manage their finances and, critically for competition in market, understand what their bank is actually costing them.

“The CMA has had to grapple with the fact that consumers are more reluctant to switch current accounts than any other essential service. Many of the banks have offered serious incentives to encourage people to change account, yet switching numbers remain small. This makes it even more important to give consumers confidence in the process, keeping the barriers to switching at a minimum while highlighting the benefits of voting with your feet.

“The CMA’s package of remedies, including the implementation of Open Banking, will go some way to removing the barriers that still exist. It is important that banks get on board quickly and deliver the required improvements. We would like to see the banks go further in some areas – such as changing the Current Account Switch Service to allow customers tokeep their old account open and giving information about the likely size of any overdraft applied for prior to the switch being made. Our recent research found that two thirds of current account holders don’t know whether they can switch when they are overdrawn – this needs to be properly addressed.

“The good news is that the remedies outlined in today’s report should better equip consumers when making important decisions about their finances.”

FOR MORE INFORMATION

Rory Stoves
Phone: 020 3872 5613
Email: rory.stoves@uswitch.com
Twitter: @UswitchPR

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