UK: competition watchdog backs mobile tech to shake up banking

The UK’s financial watchdog, the Competition and Markets Authority, announced steps to create a more open banking market in which a handful of major banks now dominate.

The steps focus heavily on the retail market.

In a new report, the CMA noted that new banks find it difficult to compete in a UK market where the largest four banks – Lloyds Banking Group Plc, Royal Bank of Scotland Group Plc, Barclays Plc, and HSBC Holdings Plc – have a share of 77% of the current account deposits and about 85% of the deposits from small businesses.

Alasdair Smith, chair of the CMA’s retail banking investigation, said, “The reforms we have announced today will shake up retail banking for years to come, and ensure that both personal customers and small businesses get a better deal from their banks. We are breaking down the barriers which have made it too easy for established banks to hold on to their customer.”

The CMA’s primary recommendation is for banks to implement an “open” system, which revolves around mobile technology and enables consumers to manage their bank accounts. Implementation of an accessible digital technology will allow customers to manage their financial information including mortgages, overdraft and current accounts seamlessly.

Full Content: Investopedia

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