Uswitch comments on the CMA’s provisional findings in the retail banking market investigation

Commenting on the publication of the CMA’s provisional findings of the retail banking market review, Richard Neudegg, regulatory expert athttps://www.uswitch.com/banking/>**Uswitch.com****, says**: “These findings confirm what we already know – that not enough people are switching current accounts to encourage competition, despite the seven day switching service making it even easier to change banks. In fact, CASS figures out today show that switching has fallen by 14% in the last year.

“With only 8% of us switching current accounts in the last three years, there is clearly more to be done to ensure that banks feel the pressure to up their game. We have not seen large numbers of people vote with their feet, even though some providers have upped the ante with switching incentives, innovative products and high interest rates on balances.

“Getting people engaged is the first step in boosting switching numbers. Shining a light on the fees that many people are charged could help them assess what their current account is actually costing them and if it would be worth switching.

“The good news is that the CMA has avoided calling for a monthly charge on all accounts, as some have suggested, which could stifle competition even more, as well as lining the pockets of the banks. Providers should be able to offer innovative and exciting products, giving customers what they need – with or without a fee attached. Those who steer clear of their overdrafts and other fees have a decent choice of free bank accounts – some of which even pay their customers.

“However people shouldn’t be under any illusion that banking is always free. Most people who use an overdraft will incur some type of fee. The CMA’s possible remedies to improve understanding of overdraft charges will go some way to making sure people aren’t in the dark about these often forgotten about costs, as well as helping them to become more engaged with their bank account. Spelling out charges in black and white could wake people up to the fact that they may not have the best account for their needs.

“One remedy that the CMA has avoided though is breaking up the banks. With the vast majority of consumers still not switching, it’s not surprising that there is a culture of complacency amongst the big four banks who have 70% of the current account market between them. When it comes to customer service and product innovation, there is simply not enough motivation for the banks to up their game.

For more information visit https://www.uswitch.com/banking/>**https://www.uswitch.com/banking/** or call