‘The reforms we have announced today will shake up retail banking for years to come, and ensure that personal customers get a better deal from their banks.’ — Alasdair Smith, Chair of the CMA Investigation.
The Competition & Market Authority (CMA) published its final report today which is the culmination of almost two years’ work. Whilst the CMA have been discovering what would benefit customers, we here at Starling have been building a bank ready for the challenge.
Whilst many believe that the report has not gone far enough to disrupt the market and introduce more competition, we applaud some of the key elements. We believe the key pillars of the report will deliver real benefit for customers in the longer term. New generation banks, like Starling, with the agility and focus on customers will be able to respond quickly to meet, and go beyond the recommendations of the report.
The CMA has defined the basic hygiene factors needed to improve people’s day-to-day banking experience.
To be notified when you go overdrawn, benefit from transparent pricing and have the opportunity to compare services, should not be seen as anything but a basic right for a banking customer in today’s world.
In our regular conversations with customers, we have discussed with them the benefits of some of the foundation measures being put in place today. For some, they express frustration with their bank but the perceived hassle of switching deters them. For others, they do not see the compelling proposition from alternative providers. Without true innovative competition and education on switching methods it is unlikely that switching rates will improve.
Competition enquiries and rhetoric won’t improve the situation, it requires genuine action, compelling proposals and value for money for customers. A number of new banks, such as Starling, will be coming to market over the next year. It is only then that will we be able to determine whether the combination of competition measures, new innovative propositions and the overcoming of customer inertia will lead to a transformation of the market.
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