MPs have said that the Competition and Markets Authority (CMA) must force high street banks to improve their customer service.
On Friday, the CMA announced a two month consultation on a large scale competition investigation into personal and small business banking, which could last 18 months.
Senior executives from the CMA appeared before the Treasury select committee, where they were told that reforms must be made.
Andrew Tyrie, Conservative MP and chair of the committee, said:
“We’ve had a litany of terrible stories told us by our constituents … one of the problems has been not enough competition to drive up standards.
“This has been evident for years, decades and we’ve finally had enough and want to see some action, you’re a new body we want you to deliver some action.”
The CMA has taken on the work of all previous competition bodies, giving it more authority to make reforms in the banking industry.
One option would be to break up the banks. The big four – Lloyds Banking Group, RBS, HSBC and Barclays – currently have a 77% share of personal and an 85% share of business banking.
Initiatives are already underway to improve service, including allowing customers to switch their accounts in seven days, but senior staff at the CMA say this is unlikely to be enough.
Image by Rubin Starset