The CMA has announced its decision to launch an in-depth market investigation into the personal current account and SME retail banking sectors, confirming its provisional decision of 18 July 2014. The investigation will be conducted by a Market Reference Group drawn from the Competition and Markets Authority’s (CMA) panel of independent members.

Following the announcement in July, the CMA embarked on a consultation regarding its provisional decision to launch a market investigation. Most respondents agreed that there should be a market investigation. Having carefully considered the consultation responses, the CMA continues to have concerns about the effectiveness of competition in these sectors and has decided to make a market investigation reference. These concerns include:

  • Low levels of customers shopping around and switching.
  • Limited transparency, and difficulties for customers in making comparisons between banks, particularly for complex overdraft charges on personal current accounts.
  • Continuing barriers to entry and expansion into the sector, limiting the ability of smaller and newer providers to develop their businesses.
  • Very little movement over time in the market shares of the 4 largest banks, which provide over three-quarters of personal and business current accounts.

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.

Personal Current Account And Small Business Banking Face Full Competition Investigation
Personal Current Account And Small Business Banking Face Full Competition Investigation

‘After carefully considering the consultation responses, most of which supported a market investigation, we remain of the view that there should be a full market investigation into the sector, conducted by a Market Reference Group drawn from the CMA’s expert panel of independent CMA members. The Market Reference Group will investigate in detail and decide what action, if any, may be needed to improve competition for the benefit of personal and small business customers.’


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The group will be appointed shortly and will publish a timetable for the various stages of the investigation and develop and consult on an issues statement, which will set out the investigation’s proposed focus.

The CMA has also decided to conduct a review of the competition undertakings put in place following the Competition Commission’s report in 2002 into small and medium sized enterprise (SME) banking, in order to examine whether any change of circumstances since then warrant their being varied or terminated. This review will be conducted alongside the market investigation by a group composed of the same panel members as those conducting the market investigation.

All information relating to the market investigation will be available on the retail banking market investigation case page and all information regarding the review of the competition undertakings will be available on the undertakings review case page.