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UK: Free banking model stifles UK competition

By  |  February 2, 2015

British banks’ practice of offering free current or checking accounts for customers who remain in credit is unsustainable and increases the risk of future mis-selling scandals, a report by consultants PwC, a consultancy firm argued on Monday.

“The free banking model stifles innovation and competition in the current account market. It requires new challenger banks to achieve scale very quickly if they are to survive and it fails to reward banks that come up with new ideas as costs cannot be recovered.” said Steve Davies, retail banking leader at PwC.

The Competition and Markets Authority has said that free banking is one of the issues it is considering amid an investigation into the current account market.

 

Full Content: Reuters

 

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