Are we seeing any changes following the retail banking investigations?
First published by Author on July 13, 2018 in the following categories: Industry and tagged with retail banking
Following changes made by the Competition and Markets Authority (CMA) for banking practices, are we seeing any changes following the retail banking investigations?
The major issues surrounding the retail banking investigations was about barriers to entry for new banks stifling competition, as well as customers staying with their banks due to restrictions for changing banks, overdraft issues and customer engagement concerns.
The CMA found that relevant industry practises and issues had allowed for competition to fall within the category of ‘prevented, restricted and / or distorted’. Since big changes were made, have we seen any benefits?
Retail banking investigations and the switching phenomenon
Following a great deal of changes that have stemmed in-part from the CMA’s retail banking investigations, millions have switched banks due to the ease of the switch-guarantee processes. Now, it’s the banks’ responsibility to ensure that a customer can switch with ease, and all direct debits and other matters can be transferred across.
With the burden now firmly on the banks, more people have switched in recent years than ever before.
Although there has been peaks and troughs in terms of the numbers switching in the last few years, the banks have been offering incentives to switch that are largely attractive for anyone who knows they can now change their bank completely hassle-free.
More banks, more engagement
Many customers feel that there is more engagement from their banks nowadays, and there is more to choose from following new banks breaking into the market.
The retail banking investigations conducted by the CMA, and the work they have done thereafter, has been praised for developing this. Many banks are now engaging more with their customers, and there is greater clarity in terms of overdraft charges and notifications when charges are going to be made.
Positive outcomes following the retail banking investigations
There have been a number of positive outcomes following the retail banking investigations made by the CMA. I myself have recently switched banks and have experienced the benefit of a wider market and better engagement, and this was after having been with the same bank for as long as I have had an account.
Although the retail banking investigations have concluded, there has been a recent tweak to the agreements in place which can serve to show the continuing relevance of how important these investigations still are, and how important it is to ensure the market is continuously monitored.