On 17 May 2016, the Competition and Markets Authority (CMA) published its provisional decision on remedies in its retail banking market investigation. This publication includes an outline of proposals to tackle the issues hindering competition in personal current accounts (PCAs) and in banking services for small and medium-sized enterprises (SMEs).
Some of the key proposals include:
- New protections for overdraft users with a particular focus on requiring banks to set a monthly charge for unarranged overdrafts on PCAs, and sending alerts when they are going into their unarranged overdraft to give them time to avoid the charges.
- Encouraging the development of new online comparison tools and improving the current account switch service (CASS) to make switching banks more straightforward and to give customers more awareness of, and confidence in, the process.
- Requiring banks to move swiftly to introduce an Open API (application programming interface) banking standard to enable personal and SME customers to safely and securely share their unique transaction history with other banks and trusted third parties.
- Requiring banks to regularly prompt their customers to check that they are getting good value from their banking provider.
The CMA believes these changes could bring benefits to bank customers to a value of £1 billion over five years.
The CMA invites comments on these proposals by 7 June 2016. The CMA will publish its final report on the retail banking market investigation by 12 August 2016.