The decision follows the publication of a report today which identifies what it says are flaws in competition in the banking market, including barriers to entry, little movement in the market shares in the sector and customer perceptions that there is a lack of difference between providers.
Although we recently the saw the introduction of new roles to make bank switching easier, the report found that switching levels remain low.
Alex Chisholm, chief executive of the CMA, said: “Competitive personal and SME banking markets are essential to households and businesses throughout the country, and to the success of the UK economy.
“However, our studies have found that despite some positive developments, significant competition concerns remain which mean that customers may not be getting consistently good service and value from their banks.”
The news was welcomed by business groups. John Allan, national chairman of the Federation of Small Businesses (FSB), said the group hoped the investigation would focus on the how to reduce barriers of entry for new banks, including alternative finance providers, and boosting transparency.
He said: “While there has been some welcome progress to tackle these structural issues, the FSB believes progress has been limited and slow. By putting all these issues in one place, we hope this review will finally lead to the effective remedies”.
Anthony Brown, chief executive of the British Bankers Association, said that banks would cooperate fully.
He said: “Banks are pro-competition – they compete for customers every day. Last month we published a series of ideas to help new banks set up and smaller players to grow. We hope these suggestions will be taken up by regulators and politicians.”
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