Financial Conduct Authority
|Printable version||E-mail this to a friend|
FCA acts to improve competition in the current account market
The Financial Conduct Authority (FCA) has announced that it will take action to improve competition in the current account market. This follows a series of recommendations which were proposed by the Competition and Markets Authority (CMA) as part of its investigation into retail banking.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
“It’s important that competition works well in the retail banking sector. Our work, taking action in response to the CMA’s recommendations, will help to further drive effective competition by helping customers and small businesses to take more control of their finances.
“Our role in regulating retail banking markets goes beyond the remedies the CMA has asked us to take forward, and we will continue to look more broadly at how well these markets work, with a particular focus planned on high-cost credit including overdrafts. We will also be looking at wider retail banking business models."
The FCA will take action in a number of areas:
Improved transparency for overdraft users
The CMA recommended that the FCA research, test and implement measures to increase consumers’ engagement with their overdraft use and charges, and the FCA will take action in response to this recommendation. The FCA will also consider the need for rules in relation to the proposed Monthly Maximum Charge (MMC) and will begin to collect data in 2017 in order to do this.
In addition, beyond the scope of the CMA’s recommendations, the FCA will also undertake work on overdrafts (both arranged and unarranged). This will fall within the FCA’s future work on high-cost credit and the FCA will publish more detail on the scope of this work in a Call for Input later this year.
The FCA welcomes the introduction of the Open Banking standard and will take forward the other recommendations from the CMA, which includes acting as an observer on the Open Banking steering group.
Improving service and prompting increased customer engagement
To help consumers assess the differences in service quality between banks, the FCA will consider requiring banks to publish better, comparable information. The FCA will set up an expert group to consider what information should be published.
The CMA also recommended that the FCA develop and test 'prompts' encouraging consumers to consider their banking arrangements. For both individual consumers and small and medium-sized enterprises, the FCA will research which prompts are most likely to help consumers understand their account usage and how much their account costs, and encourage them to consider switching. This research and testing will begin in early 2017.
Beyond current accounts
Additionally, the FCA are continuing to consider the competition and conduct implications of the business model links between current accounts and other retail banking products. This work is still being scoped as part of our 2017/18 business planning process and the FCA will make a further statement on this.
Notes to editors
- Read our response to the CMA’s final report on its investigation into competition in the retail banking market.
- On 9 August 2016 the Competition and Markets Authority (CMA) published its final report into the effectiveness of competition in the retail banking market (link is external). The report set out a package of remedies to address the problems it found. Many of these remedies the CMA is taking forward itself. However the CMA also made recommendations to the FCA, which the announcement today addresses.
- On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.
Latest News from
Financial Conduct Authority
FCA publishes decision notice against Alistair Burns deciding to ban him and fine him £233,60002/12/2016 14:25:00
The Financial Conduct Authority has yesterday published a Decision Notice in respect of Alistair Burns, Chief Executive at TailorMade Independent Limited (TMI).
FCA publishes new data on savings interest rates and announces new rules coming into effect02/12/2016 11:10:00
The Financial Conduct Authority (FCA) has yesterday published the third and final ‘sunlight remedy’ data set, showing the lowest interest rates available from 32 providers of cash savings accounts and easy access cash ISAs.
Two plead guilty to insider dealing01/12/2016 13:05:00
In a case brought by the Financial Conduct Authority (FCA) Manjeet Mohal and Reshim Birk have yesterday pleaded guilty to three counts of insider dealing on day three of their trial at the Central Criminal Court. They will be sentenced on 13 January 2017.
FCA launches call for input on high-cost credit and overdrafts29/11/2016 12:15:00
The Financial Conduct Authority (FCA) has today announced that it is seeking evidence and feedback to further inform its work on high-cost credit, including a review of the payday loan price cap.
Customers to be shown how much they could gain from shopping around for an annuity25/11/2016 15:10:00
Annuity providers will be required to inform their customers how much they could gain from shopping around and switching provider before they purchase an annuity under plans announced today by the Financial Conduct Authority (FCA).