CMA Provisional Findings on Retail Banking
The CMA released its initial findings from its study into the retail banking sector and launched a consultation inviting views on its provisional decision to conduct a full-blown investigation in to personal current accounts and business accounts*. The regulator has found that parts of the UK retail banking industry, lack effective competition and are failing to meet the needs of consumers.
On 1st July 2014, Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, and Anthony Thomson, co-founder and former Chairman of Metro Bank and founder of Atom Bank, launched Agiliti™, a software-as-a-service technology that enables speed-to-market for new entrants into the UK banking sector.
Fiserv Perspective on Banking Market Share
Travers Clarke-Walker, Managing Director EMEA at Fiserv, commented: “Competition in the UK banking sector isn’t working. The big four have the majority of market share and although we have seen more providers such as Tesco Bank entering the current account market in the last 12 months, and others such as Atom and Virgin Money expected to enter it in the next year, we still have a long way to go before the market can be considered truly competitive. An investigation in to the market would therefore be a step in the right direction to ensuring that consumers have more choice when it comes to their banking relationship.
Challenges to Enhancing Market Competition
“However, improving competition can only be achieved if the barriers to entry and expansion are reduced. While efforts are being made to facilitate entrance in to the market, such as the FCA and PRA recently reducing the minimum amount of initial capital required by small credit institutions from £5m to £1m**, there are still hurdles to overcome.
IT Infrastructure: A Barrier for New Entrants
“One of the biggest barriers that still exists is IT. Traditionally, new entrants have had to depend on agency banks to provide their IT – an option that can be extremely costly – or invest a huge amount of time and capital into developing their own IT infrastructure. The launch of Agiliti means that this is no longer an issue for new entrants and the final barrier has been removed.”
