Conducted by a market reference group drawn from CMA’s panel of independent members, the probe would focus on difficulties customers face while switching banks, and limited transparency and difficulties for customers in making comparisons between banks.
Continuing barriers to entry and expansion into the sector that restrict the ability of smaller and newer providers to develop their businesses would also be investigated, in addition to very little movement over time in the market shares of the UK’s four largest banks.
CMA chief executive Alex Chisholm said: "Effective competition in retail banking is critically important for individual bank customers, small and medium-sized businesses, and the wider economy.
"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."
In July, CMA announced plans to conduct in-depth market investigation into the markets for personal current accounts having revenues of more than £8bn and SME banking, comprising more than £2bn business current account market and business loans.
A consultation was launched the same month in which most respondents agreed that there should be a market investigation.
The market reference group is scheduled to be appointed shortly and will publish a timetable for the various stages of the investigation, and also develop and consult on an issues statement that will unfold the investigation’s proposed focus.
Meanwhile, the group would also simultaneously conduct a review of the competition undertakings put in place after the Competition Commission’s (CC) report in 2002 into SME banking, to help examine whether any change of circumstances since then warrant their being varied or terminated.
Image: The UK is launching an in-depth market investigation into the personal current account and SME retail banking sectors. Photo: © Crown copyright.
