Banking probe confirmed

Banking probe confirmedA full-scale probe into the UK banking industry has been given the go ahead because of fears larger banks could be limiting competition.

The Competition and Markets Authority (CMA) said its investigation will focus on the personal current account and small business retail areas of the sector to assess whether consumers or not are getting a good deal.

Sky News recently reported that a number of the major banks had lobbied for the inquiry to be halted or delayed, but their efforts were unsuccessful.

At present, the country’s four largest banks – Lloyds, RBS, Barclays and HSBC – supply 77 per cent of the UK’s personal current accounts. They also control around 85 per cent of small and medium-sized business accounts.

It is estimated these two sectors account for around £10 billon and smaller banks believe this is limiting the choice and service given to customers.

In particular, the CMA has raised concerns that people do not shop around and switching current accounts is rare. It is hoped the probe will encourage more transparency in the industry and therefore boost competition levels.

Alex Chisholm, CMA chief executive, said: “Effective competition in retail banking is critically important for individual bank customers, small and medium-sized businesses and the wider economy.”

It is expected the inquiry could take around two years to complete and chief executive of the bank industry group the BBA, Anthony Browne, said all of the banks will “will co-operate fully with any investigation”.

He added: “There are already substantial changes currently underway across the banking industry to strengthen competition.”

However, Paul Pester, chief executive of TSB Bank, said: “The big four banks have had a stranglehold on the market for far too long.”

Find the latest compliance jobs with Barclay Simpson, leaders in compliance recruitment.ADNFCR-1684-ID-801759207-ADNFCR