CMA to launch investigation into UK banks competition

UK banks are to be subject to a full investigation from markets watchdog the Competition and Markets Authority (CMA).

The organisation has recommended a competition assessment into banks across the UK which will include assessing the provision of current accounts and business lending. The 'big five' High Street banks will be the main focus of the investigation as they are responsible for 77 per cent of current accounts. They will be watching the CMA's inquiry with interest when it is completed by September 17th.

One of the reasons behind the investigation is to ensure that customers are getting the best possible deal from their banks. The CMA said that many customers are failing to see much difference between the offers that the main High Street are providing. It added that there is still a low number of consumers that switch between banks in order to get the best deal.

Speaking to BBC Radio 4's Today programme, Alex Chisholm, CMA chief executive, said: "At the moment they [the banks] don't seem to be doing a good job of satisfying their customers, there are a lot of under-satisfied customers out there, small businesses are saying they are not happy with the choices they face and the services they are getting, and in the personal market as well, the big [five] banks, the satisfaction rating is below 60 per cent."

Mr Chisholm went on to add that there is a lack of rivalry within the banking sector which is costing the customer valuable options. Without strong competition between banks, consumers are not able to tell whether or not they are getting the best deal or if their money is in the right place.

Previously the likes of Natwest have offered special offers to students such as a free Young Person's Railcard but this only a small incentive to ensure people bank with it.

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