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The CMA’s proposed changes to banking don’t go far enough

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The Competition and Markets Authority (CMA) has made a number of suggestions to improve the current account market. But they don’t go far enough.

Today we got a chance to see what the CMA has been working on in its 18 month investigation of the current account market. It’s confirmed what we’ve been saying for some time – competition in the banking market just isn’t working.

A lack of competition

The big four banks – Lloyds, Royal Bank of Scotland, HSBC and Barclays – control more than three quarters of Britain’s personal current accounts. And that’s not likely to change any time soon, since only 3% of customers switched in 2014.

More than a third of customers have been with the same bank for more than 20 years. Indeed, it’s quite telling that you’re more likely to break up with your partner than with your bank. No wonder the big banks are failing to compete for our business.

Our campaign supporter Anthony has harsh words for the banks:

‘Banks are making money out of people who don’t switch or check their accounts regularly. Often these people will be elderly or vulnerable. Most banks do not reward customer loyalty, act amorally and treat savers with contempt.’

Making it easier to switch

The CMA makes it very clear that competition isn’t working and that we need to be encouraged to switch from accounts that aren’t right for us. And breaking up with your bank could be good for your pocket, with the CMA suggesting that you could be £70 a year better off. That rises to £260 a year if someone’s regularly dipping into their overdraft.

So what does the CMA propose should change? Their suggestions include:

  • Banks prompting customers to switch at certain trigger points, such as after branch closures or when overdraft charges change
  • Making it easier for us to switch by allowing customers to see their transaction history to help us compare banks
  • Funding a ‘sustained’ advertising campaign for the Current Account Switching Service to help raise public confidence in switching

We need more radical action

But will these changes actually change banks’ behaviour? We don’t think so, and we’d like to see more radical action. The CMA’s own evidence shows that people are disengaged from the banking market, so better information and nudges to switch simply won’t be enough.

We need to see creative solutions that’ll spur the banks into genuinely competing with one another. So we want the CMA to:

  • Look at forcing banks to more proactively help customers who regularly use an unauthorised overdraft, as well as increasing compensation for customers who suffer poor service
  • Regularly name and shame the worst providers for bad behaviour
  • Consider how banks can put people in control of their overdrafts, for example by notifying customers before they go into the red

The regulator now has six months to find more radical ways to promote switching, improve information for customers and punish banks who fail to treat their customers fairly.

Do the CMA’s proposed changes to the bank current account market go far enough?

No (72%, 1,082 Votes)

Don’t know (23%, 340 Votes)

Yes (6%, 86 Votes)

Total Voters: 1,508

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Useful links

Read the CMA’s retail banking market investigation – summary of provisional findings report (PDF)


Extract from Wiki: “Iceland had passed a law on 6 October 2008 – the day before the Landsbanki bankruptcy – that guaranteed full coverage of lost deposits for domestic Icelandic customers in the event of any Icelandic bank’s bankruptcy. At the same time, there was no guarantee for foreign customers of the same bank”.
So the UK government refunded its residents who had lost money (I’m not sure why because at the time, if I remember, savings interest was above the norm. If it is too good……?)
Certainly a “wise” move on Iceland’s part though :-).


Contrary to others’ experience, my wife and I have been satisfied with the service that Nationwide has given us for a joint current FlexAccount and several savings accounts, over a period of more than 25 years. We switched from Barclays in the 1980s because of bad service.

Our annual charges with Nationwide come to only a couple of pounds for running our FlexAccount, with all of our (modest) income passing through it every month. We have an arranged overdraft that is only used partially in occasional emergency, and the interest on that for a few days is the only cost to us. Furthermore, free travel insurance is provided for FlexAccount customers – that’s worth a bob or two.

I doubt that we would do any better with any other bank. Mind you, Nationwide continually asks us to ‘upgrade’ to a chargeable Flex+ account, with a few extra bells and whistles. I wonder how many long-standing FlexAccount customers there are like us, still with Nationwide.


Sam M….. here’s one ! I’ve banked at all the “Big Five” over the years, and left for the same reason : indifferent, ignorant, uninformed service; however, Nationwide are the best of the bunch thus far.

MaxM says:
24 October 2015

It’s odd how the public has rules and laws to obey and when they are broken, punishment follows. Institutions and businesses have voluntary Agreements and Codes of Conduct which is exempt from the law. These people make up their own laws however unfair or unjust they are, which are usually upheld by the biased, idiotic, corrupt court system.
The reason why the public are totally ignored is because people have become sheep, they have had dissent beaten out of them by the police, secret service and the courts. People are no longer willing to sacrifice and die or kill for a cause, as were our ancestors. Our rulers know this, so are indifferent to and even callous and scornful towards who they term as, the ‘peasants’. It WILL get worse!

Patricia A says:
24 October 2015

Corrupt banks should not be bailed out by the taxpayer and the perpetrators should be sent to prison.


The current government appear keen to impliment their ‘Charter for Budget Responsibility’, which would legally force future UK governments to run an absolute budget surplus. Basically, this means it would be spending less than it collects in taxes, seemingly having us (the taxpayer) at heart. So, if this would appear to be a fairly reasonable idea, why not also implement a similar charter which would legally compel future UK governments NOT to bail out banks and financial institutions with public money? I can’t help but wonder, is the government’s heart really with the taxpayer or the banks?


Once a bank starts to collapse [e.g. Northern Rock] the authorities have no choice but to prevent that and to throw a lifeline to rescue the depositors. The trick that eluded previous governments is to prevent a collapse in the first place through sufficient reserves, adequate controls, and strict regulation. Whether we have yet attained that happy state of no more banking failures remains to be seen. Letting banks go under, dragging down millions of personal customers with them, is a brave suggestion, and switching banks would then be a bit like Russian roulette. There has been no suggestion that Northern Rock was corrupt; it got greedy and over-reached itself. Other bank misfortunes have been due to improper behaviour that probably was corrupt because the intention was to manipulate the markets for both corporate and personal gain. Some heavy fines have been imposed on the banks but in most cases the individuals involved have been allowed to quietly leave the scene with their career and reputation in tatters. I would agree with imprisonment if it were funded by the perpetrators.


My husband and I have banked with Barclays for 30 years, they have never given us any perks like free insurance, but we always had an agreed overdraft, which we only ever got charged for If we went over it. Now and for the last 6 months Barclays charge us as soon as we go into it, granted they do send me a txt to say I’m about to go into it, but to me what’s the point of having the overdraft. So I am now looking to change banks, as Barclays don’t appear to care about loyalty to long standing customers.