The Competition and Markets Authority (CMA), the successor body to the Office of Fair Trading (OFT) and the Competition Commission, announced its provisional decision on 18 July 2014, that there should be a ‘joined up in-depth’ market investigation into the markets for banking services for SMEs and the supply of personal current accounts.
In relation to the supply of personal current accounts, the CMA has been updating the OFT’s 2013 review of the personal current account market. In doing so, the CMA has considered certain longstanding competition concerns identified by the OFT, including high levels of concentration, low levels of new entry and low switching rates, and any developments in the sector in light of the following changes:
- The introduction of the new seven-day Current Account Switching Service.
- The impact of the planned divestments by Lloyds Banking Group and by the Royal Bank of Scotland of parts of their retail banking businesses.
- The forthcoming establishment of the Payment Systems Regulator.
What this means for you
The CMA will consult until 17 September 2014 on its provisional decision. The CMA will make a final decision regarding the market investigation reference in Autumn 2014. In the event that a market investigation reference is made, a panel of independent members of the CMA will undertake an in-depth and time consuming review over a period of 18 months with a view to determining whether there are market features which prevent or restrict competition in the supply of these banking services.