The SME banking market study is the conclusion of a joint project with the Financial Conduct Authority, and represents the first formal collaboration between the organisations. The FCA also provided input into the CMA’s study of the personal current account sector.
The CMA is now consulting on its provisional decision that there should be a joined up in-depth market investigation into the markets for personal current accounts (with revenues of over £8 billion) and SME banking (including the over £2 billion business current account market and business loans).
The CMA and FCA have carefully considered a wide range of recent regulatory initiatives and other developments designed to improve competition. These include initiatives to make the authorisation regime for new banks simpler and faster, to make switching easier and also to improve transparency. However, despite these important developments, and evidence of new entry, the market studies have identified a number of common concerns, together with evidence that competition is not effectively serving the interests of SMEs or PCA customers.
Alex Chisholm, CMA Chief Executive, said:
"Competitive personal and SME banking markets are essential to households and businesses throughout the country, and to the success of the UK economy.
"However, our studies have found that despite some positive developments, significant competition concerns remain which mean that customers may not be getting consistently good service and value from their banks.
"Our provisional view is that a full market investigation by an independent, expert CMA group is necessary to look at this market in detail and identify appropriate measures if competition concerns are found. However we very much welcome views, which we will carefully consider, before taking a final decision."
