CMA to push ahead with SME banking probe
THE Competition and Markets Authority (CMA) is to push ahead with a full investigation into current account and SME banking.
It launched a consultation in July and said today most respondents had “agreed that there should be a market investigation”.
The regulator said its main concerns were: low levels of customers shopping around and switching; limited transparency and difficulties for customers in making comparisons between banks; barriers to entry to the sector; and little movement over time in the market shares of the four largest banks.
CMA chief executive Alex Chisholm said: “Effective competition in retail banking is critically important for individual bank customers, small and medium-sized businesses, and the wider economy.
“After carefully considering the consultation responses, most of which supported a market investigation, we remain of the view that there should be a full market investigation into the sector, conducted by a market reference group drawn from the CMA’s expert panel of independent CMA members. The market reference group will investigate in detail and decide what action, if any, may be needed to improve competition for the benefit of personal and small business customers.”
The CMA will also carry out a review of undertakings put in place following a 2002 review by its predecessor, the Competition Commission, into SME banking.
