On 21 June 2012, the OFT published a speech by Maxwell, the new Executive Director of the OFT, on competition in the financial services sector. In his speech, he emphasised the importance of the financial markets in the functioning of our economy, and explained how problems in this sector could lead to less efficient resource allocation, poor management of risk, less economic activity, and significant consumer detriment due to the large size of financial markets. He stated there are a number of problems in this area, in particular, there has been a lack of “customer focus” on the part of providers. Customers are often badly informed about products and services, and in certain instances, banks have been found to exploit customers, e.g. many banks mis-sold payment protection insurance and are now paying out large sums in compensation. As a result, Maxwell calls on a number of ways to tackle these problems including: most importantly change on the part of the banks’ behaviours; intervention by regulators such as the OFT and government; and a change in approach by the new Financial Conduct Authority (FCA) shifting away from the Financial Services Authority’s (FSA) current approach of talking to management and looking at systems and controls, to a new approach where the FCA will go further to see what customers really experience and with a greater emphasis on firms improving the way they design and sell products. Maxwell believes that banks will feel pressure from the OFT and FCA, as well as new competitors such as Metro Bank and Virgin Money. He went on to discuss what a well-functioning retail banking market would look like and the challenge for banks to change. Finally, the OFT will be: shortly launching a review of the personal current account market; working more closely with the FSA and FCA; and focusing on areas such as SME banking. However, if the OFT finds that the concentrated market structure of UK banking is a problem, it will consider a reference to the Competition Commission. Read more.