The UK Competition and Markets Authority (CMA) is planning to launch an investigation into the UK retail banking sector in a move which could see high-street giants being broken up.
The CMA has made a provisional decision to go ahead with a full-scale, 18-month long inquiry into the industry, although it will first carry out a consultation before making a final call later in the year. The move comes after two CMA studies which found that the £8 billion personal current account market and the £2 billion SME banking market suffer from a lack of competition.
The UK’s big four banks – Barclays, HSBC, Lloyds and RBS – hold 77% of the personal current account market and 85% of the business current accounts despite the entrance of Metro Bank, Tesco and Virgin into the retail banking space.
The CMA has also highlighted a lack of transparency which makes it difficult for customers to compare providers. The government is currently working with banks to address this by letting UK consumers download all of their current account data and input it into online tools to show banking provider comparisons.