Banks must make it easier for customers to take charge of their accounts, including raising awareness of switching, the competition regulator has announced today.

Publishing its provisional findings as part of an in-depth investigation into the current account sector, the Competition and Markets Authority (CMA) has found that banks don't have to work hard enough to compete for customers.

It found that 57% of consumers have been with their current account provider for more than 10 years, and 37% for more than 20 years.

The CMA says customers fear that switching their current account to a new bank will be complicated, time-consuming and risky, with only 3% switching in 2014.

It adds that a lack of information, complex overdraft charges, and limited comparison tools also make it difficult for customers to know what they're paying and to compare accounts.

However, it's not gone as far as recommending an end to free if-in-credit accounts, or to force the break-up of banks.

It believes customers won't benefit from a more competitive marketplace until they can compare accounts more easily and feel confident they can switch without risk.

Martin Lewis
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'The market isn't broken, it just doesn't work as well as it needs to'

Martin Lewis, founder of, says: "The CMA is right – the market isn't broken, it just doesn’t work as well as it needs to. The problem isn’t the product offering for those in credit, currently six banks will pay switchers bribes of more than £100 to switch, others give cashback on bills, up to 5% interest on savings or just pay them £5 each month.

"The problem is people don’t switch enough, some just because they're happy, others because of fear of change. The banks need to fund a bigger, better and more powerful campaign to reassure people that if they switch, everything will be OK. In our study, 82% of people who have used the new seven-day switching service said it's easy and hassle free, but the perception of those who haven't tried is that it'll be a nightmare. Breaking that disjoin is crucial.

"Easier comparison is one step to this. I had pledged to launch a bank comparison tool based on Midata (where the customer owns their banking data), yet the banks either negligently or deliberately made the way they give the data, and what the data is, so unworkable it was pointless. The CMA looks to want to remedy that, and it’d be very welcome if it does. Though we can't wait for the final report, this is something that needs to be done now.

"The biggest problem is the lack of competition in the overdraft market and it’s there that people really do pay for their banking, so I would be keen to see rules that propose your new bank must match your existing overdraft, preferably at a cheaper rate, in a similar way to balance transfers and credit cards. Though all the CMA is proposing is they must tell you in advance what the new overdraft will be."

Banks told to make switching easier
Banks must do more to ensure current account users get the best deal

What does the CMA propose?

The CMA has proposed the following changes, which will now be consulted on. A final report will be published in May 2016.

  • Requiring banks to prompt customers to review their service. Banks should send individual messages to customers at certain ‘trigger points’, which could include a loss of service, closure of their local branch, unarranged overdraft charges or a change in the terms and conditions of their account.

  • Requiring banks to help raise awareness of, and confidence in, switching. Banks should increase funding for a widespread advertising campaign promoting the seven-day current account switch service launched in 2013, and improve the service it offers.

  • Making it easier to compare bank products by improving 'Midata'. This online tool, which launched with the support of the Government, allows users to download their banking data and input it directly into a price comparison website, which can then analyse their transactions, and alert them to available bank accounts which best suit their needs.

  • Making overdraft facilities clearer. It should be easier for prospective customers to find out before switching whether the overdraft facilities they want are available to them.
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