Ever thought that you were getting a raw deal from your bank?
Ever thought that your bank wasn’t listening or particularly interested in the problems your small business might be facing? Well, if you do, then you are certainly not alone. One of the major criticisms we hear as accountants is that the banking system seems to be more focused on protecting its own interests, rather than addressing the concerns of its customers. Well, there is some ‘good’ news on the horizon. The Competition and Markets Authority (CMA) is to launch a full inquiry into competition within the market for current accounts and small business banking.
Whether this inquiry will recommend and force through changes to the current system, however, remains unclear at the moment.
So what issues will the inquiry be focusing on? Well, the probe will be designed to assess the issues and difficulties customers currently face: issues like switching banks and the overall lack of smaller competitors to the leading High Street banks. To assess the current state ad robustness of the banking system the inquiry will consult with members of the public, banks and other industry bodies.
The CMA has highlighted that the major focus of the inquiry will be on key concerns about the UK’s banking services:
- Why are so few customers switching banks or shopping around for the best possible rates?
- Why is there a patent lack of transparency and difficulty in comparing services from different banks?
- What barriers are faced by smaller banks in attempting to enter the market?
- Why have the ‘big four’ High Street banks continued to dominate in a sector that is supposed to have opened up?
Unsurprisingly, the big four High Street banks have argued that the CMA probe is unnecessary. In fact, a spokesperson for Barclays bank was quoted as saying that in its view, the review is “not appropriate at this time”.
“Various developments, innovations and stimuli are changing the competitive landscape in relation to both [personal current accounts] and [small and medium enterprises] banking, and these must be given time to mature,” he added.
Meanwhile, Lloyds Banking Group, which it should be remembered still remains partly owned by the UK taxpayer, said that although it will cooperate with the CMA, it “did not consider that such a reference is necessary”.
HSBC also spoke of its concern that the CMA had previously “taken a backward looking view” of both current accounts and small business lending.
However, a spokesperson for the British Chambers of Commerce openly welcomed the review, saying:
“For many years Britain’s dysfunctional banking sector has struggled to meet the needs of [small and medium enterprises], impeding the growth prospects of some of our most promising young companies.”
For more information call Steven Glicher accountants on 0161 485 8007 or email firstname.lastname@example.org.