The CMA has today 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. 

Despite a series of investigations and regulatory initiatives to encourage competition, both the CMA and the FCA continue to have concerns with the high levels of concentration in the retail banking sector and low levels of customers shopping around and switching.   

As well as looking in detail at the structure of the markets and barriers to entry and expansion the investigation will scrutinise the conduct of the banks in the markets concerned.  As regards personal current accounts, a key feature of the market is likely to be the 'free in credit' pricing model and concerns around cross-subsidisation.

The CMA will shortly announce the Market Reference Group.  The group will then 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 group will have 18 months to conclude its investigation.

More information can be found here.