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Tesco has accused UK major banks of sharing customer data. It's a claim they've refuted but the accusation - from Benny Higgins, boss of Tesco Bank - carries another sting: that the banks also operate a cartel on consumer credit data. However there's been plenty of denial from banking players so far.
Denial
"The established banks routinely share current account data which can be used to calculate income and expenditure, as well as wider product holdings, through a closed user group," Benny Higgins told the Treasury Select Committee. "This puts smaller players at a disadvantage."
Tesco accuse the banks of sharing information through a company called Callcredit Information Group - originally founded by HSBC, Lloyds, RBS and Barclays, though Callcredit vigorously have denied the accusation.
Barriers to entry?
Tesco Bank may be a smaller player but it's growing quickly with more than 6m accounts currently; mortgages are likely to be offered in the near future. So it's in their interests for there to be a level playing field, particularly on any issues related to consumer creditworthiness.
Tesco's also gunning hard at the insurance market; it also launched a new bond in October for savers and it's clearly making the most of the financial crisis and the public's distrust of banks and rip-off charges.
Yet if Tesco start slapping heavy charges and fees on their customers, they will shop elsewhere. Meanwhile, it's attempting to kick down as many barriers to entry as it can.
Tesco has accused UK major banks of sharing customer data. It's a claim they've refuted but the accusation - from Benny Higgins, boss of Tesco Bank - carries another sting: that the banks also operate a cartel on consumer credit data. However there's been plenty of denial from banking players so far.
Denial
"The established banks routinely share current account data which can be used to calculate income and expenditure, as well as wider product holdings, through a closed user group," Benny Higgins told the Treasury Select Committee. "This puts smaller players at a disadvantage."
Tesco accuse the banks of sharing information through a company called Callcredit Information Group - originally founded by HSBC, Lloyds, RBS and Barclays, though Callcredit vigorously have denied the accusation.
Barriers to entry?
Tesco Bank may be a smaller player but it's growing quickly with more than 6m accounts currently; mortgages are likely to be offered in the near future. So it's in their interests for there to be a level playing field, particularly on any issues related to consumer creditworthiness.
Tesco's also gunning hard at the insurance market; it also launched a new bond in October for savers and it's clearly making the most of the financial crisis and the public's distrust of banks and rip-off charges.
Yet if Tesco start slapping heavy charges and fees on their customers, they will shop elsewhere. Meanwhile, it's attempting to kick down as many barriers to entry as it can.
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