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CMA Retail Banking Investigation - FINAL REPORT

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  • CMA Retail Banking Investigation - FINAL REPORT

    This " The CMA is investigating the supply of personal current accounts (PCAs) and of banking services to small and medium-sized enterprises (SMEs). " will be published on the 9th August at 7.00am.

    On 9 August at 7:00am, the CMA will publish a summary of its final report, a press release and an overview of its findings following its investigation. Final decisions on the Northern Ireland Order and the review of the SME undertakings will also be published at 7:00am. The full final report will be published during the course of the day on 9 August
    Keep an eye out here -> https://www.gov.uk/cma-cases/review-...smes-in-the-uk

    where you can also find all of the investigation documentation.
    #staysafestayhome

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  • #2
    Re: CMA Retail Banking Investigation - FINAL REPORT

    Final report





    A package of measures being imposed by the CMA will ensure banks work harder for customers and the benefits of new technology are fully exploited.
    CMA - Making banks work harder for you.

    The final report of the Competition and Markets Authority’s (CMA) retail banking market investigation, published today, concludes that older and larger banks do not have to compete hard enough for customers’ business, and smaller and newer banks find it difficult to grow. This means that many people are paying more than they should and are not benefiting from new services.

    To tackle these problems, the CMA is implementing a wide-reaching package of reforms. Central to the CMA’s remedies are measures to ensure that customers benefit from technological advances and that new entrants and smaller providers are able to compete more fairly. The key measures, which will benefit personal and small business customers, include:

    Requiring banks to implement Open Banking by early 2018, to accelerate technological change in the UK retail banking sector. Open Banking will enable personal customers and small businesses to share their data securely with other banks and with third parties, enabling them to manage their accounts with multiple providers through a single digital ‘app’, to take more control of their funds (for example to avoid overdraft charges and manage cashflow) and to compare products on the basis of their own requirements.
    Requiring banks to publish trustworthy and objective information on quality of service on their websites and in branches, so that customers can see how their own bank shapes up. Whether a personal customer or small business is willing to recommend their bank to friends, family and colleagues will be a core measure but we will also be requiring banks to publish and make available through Open Banking a range of other quality measures.
    Requiring banks to send out suitable periodic and event-based ‘prompts’ such as on the closure of a local branch or an increase in charges, to remind their customers to review whether they are getting the best value and switch banks if not. Unlike many other financial products such as home insurance, current accounts do not have annual renewal dates to act as natural reminders and other possible triggers like business growth are not prompting customers to review what they are getting from their bank.

    Underpinning these remedies, the CMA is introducing further measures to make it easier for customers to search and switch. At the moment only 3% of personal and 4% of business customers switch to a different bank in any year. This is despite, for example, personal customers in Great Britain being able to save £92 on average per year by switching provider, with savings of around £80 a year on average available for small businesses. Larger savings are available for overdraft users – for example, personal customers who are overdrawn for one or two weeks every month could save £180 per year on average.

    The CMA has also introduced specific measures to benefit unarranged overdraft users, who make up around 25% of all personal current account customers, and small businesses.

    Banks make £1.2 billion a year from unarranged overdraft charges. Banks will be required to send alerts to customers going into unarranged overdraft, and inform them of a grace period, to avoid charges – research by the FCA has shown that this type of alert, when combined with mobile banking, can heavily reduce overdraft charges. Banks will also have to set a monthly cap on unarranged charges, and tell their customers about it.
    The CMA found that small businesses lack tools providing comprehensive information about bank charges, service quality and credit availability. The CMA is throwing its weight behind the independent charity Nesta in a new initiative to put this right, requiring banks to provide Nesta with financial backing and technical support, alongside introducing a range of other measures targeted at small businesses such as a loan eligibility tool.
    Last edited by Amethyst; 12th August 2016, 08:35:AM.

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    • #3
      Re: CMA Retail Banking Investigation - FINAL REPORT

      Responses to formal consultation on draft retail banking order



      Originally posted by CAP
      Part 7: Monthly Maximum Charge (MMC) remedy

      From our work helping those in financial difficulty, we know how valuable a MMC will be in stopping overdraft debts escalating out of control. However, we want to again state our concern that as providers will be able to set their own MMC, we will not see them set atsufficiently low level to offer enough protection to consumers. This variation in MMCs across the market will also create difficulty for consumers comparing products and monitoring where the MMC has been breached. In comparison, the price cap on high-cost short-term lending is very clear, that the total cost of credit cannot exceed more than 100% of the capital. We strongly urge the CMA and FCA to consider setting an industry-wide cap onMMC or at least setting a clear expectation of the maximum MMC they would deem to be appropriate

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      • #4
        Re: CMA Retail Banking Investigation - FINAL REPORT

        https://assets.publishing.service.go...dertakings.pdf

        Undertakings.
        Attached Files
        #staysafestayhome

        Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

        Received a Court Claim? Read >>>>> First Steps

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