The Financial Conduct Authority (FCA) has today announced it will help make current accounts more open and competitive by developing a range of prompts and alerts for customers to review their bank account choices and overdraft use.
Its announcement is a response to a series of recommendations proposed by the Competition and Markets Authority (CMA) as part of its investigation into retail banking.
The CMA's report, published in August, called for banks to take part in an 'Open Banking revolution' and allow customers to manage their accounts with multiple providers through a single digital app by early 2018, as part of a package of measures designed to "shake up retail banking for years to come".
Responding, the FCA says it welcomes the CMA's drive towards more open banking and will take action in a number of areas, including:
- Developing and testing prompts designed to make customers consider their banking arrangements.
- Bring in alerts for consumers about their overdraft use and charges.
- Reviewing the effectiveness of the CMA's proposed cap on unarranged overdraft fees.
- Considering what information consumers need so they can assess differences in service quality between banks.
Work on the proposals is expected to start in 2017. The FCA says it will continue to work closely with the CMA while developing its plans.
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What does the FCA say?
Christopher Woolard, executive director of strategy and competition at the FCA, says: "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."
See our Best Bank Accounts guide for more advice on current accounts, rewards and switching.