FCA begins adopting CMA recommendations from retail banking investigation

FCA begins adopting CMA recommendations from retail banking investigation



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The Financial Conduct Authority (FCA) has announced it will be acting to improve competition in the current account market after a series of recommendations were proposed by the Competition and Markets Authority (CMA).

The FCA has highlighted four areas that it wishes to address:

Overdrafts

At the CMA’s recommendation, the FCA will research, test and implement new changes to increase consumers’ engagement with their overdraft use and charges.

The FCA will also consider introducing rules in relation to the proposed monthly maximum charge.

Innovation

The FCA agrees with the introduction of an open banking standard.

Service

The FCA will require banks to provide better, comparable information. The CMA suggested that the FCA develop and test 'prompts' for banking customers to consider their banking arrangements. This would apply to consumers and SMEs.

Current Accounts

The regulator intends to address competition and conduct concerns around current accounts and other retail banking products.

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."

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