Our response to the CMA’s final report on its investigation into competition in the retail banking market

We have set out the actions we will take forward in the retail banking market in response to a number of recommendations from the Competition and Markets Authority (CMA).

Show our response to the CMA’s final report (PDF)

The CMA published its final report into the effectiveness of competition in the retail banking market on 9 August 2016.

The report set out a package of remedies to address the problems it found. The CMA is taking forward many of these remedies itself. However, the CMA also made recommendations to us in its report.

We have published a response to the CMA’s final report and will take action in a number of areas.

Prompting increased customer engagement

The CMA recommended that we develop and test prompts which are designed to encourage consumers to consider their banking arrangements.

For both individual consumers and small and medium-sized enterprises, we will research which prompts are most likely to increase consumer awareness and understanding of account usage. This research and testing will take place throughout 2017.

Improved transparency for overdraft users

The CMA also recommended that we research, test and implement measures to increase consumers’ engagement with their overdraft use and charges, which we will take forward.

We will also review the effectiveness of the proposed Monthly Maximum Charge (MMC) and will begin to collect data in 2017 in order to do this.

In addition, we will also undertake work on overdrafts (both arranged and unarranged) beyond the scope of the CMA’s recommendations. This will fall within the scope of our future work on high-cost credit and we will publish more detail on this work in a Call for Input later this year.

Promoting innovation

We will also take forward the other recommendations from the CMA including acting as an observer in the steering group tasked with establishing the open API standard for banking.

We will use our role in the group to encourage the delivery of solutions to a broader set of accounts than current accounts.

Improving service

We will consider what information should be published to allow consumers to assess the differences in service quality between banks, in addition to the information that the CMA will require to be published. The information that is made available needs to be useful and meaningful to consumers, whether individuals or small and medium-sized enterprises.

As a preliminary step, we will set up a temporary expert group to provide views to us on what additional information could help consumers and might be taken up by commentators and comparison services.

Beyond current accounts

Additionally, we are continuing to consider the competition and conduct implications of the business model links between current accounts and other retail banking products. This work is still being scoped as part of our 2017/18 business planning process and we will make a further statement on this. 

Next steps

While we take action on the above areas, we will continue to work closely with the CMA.

If you would like to take part in, or want to know more about, the research we have outlined above you should email [email protected].