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MSE News: Current account market faces full competition inquiry
Former_MSE_Paloma
Posts: 531 Forumite
The personal current account market could face a full-scale probe by the Competition and Markets Authority"...
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Current account market faces full competition inquiry
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Current account market faces full competition inquiry
Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
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Comments
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Well, if you ask, my view is that this is one of the most competitive markets around. Even Tesco and M&S now compete with big banks and BSs. If people don't switch, this reflects just general mentality of UK population, not lack of competition. There are plenty of people that take advantage of the competition, have several (if not 10+ current accounts) and make hundreds of pounds from switching incentives....annual switching levels remain low at 3%.
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"Our provisional view is that a full market investigation by an independent, expert CMA group is necessary to look at this market in detail and identify appropriate measures if competition concerns are found.
"However we very much welcome views, which we will carefully consider, before taking a final decision."
Many people, especially those who are mostly concerned with overdraft charges, often simply cannot switch, even if they want, because of poor credit histories.
If the CMA can't find better markets to investigate they may consider staff reductions to save taxpayers money.0 -
From the BBC article on the matter:
The CMA said... free banking may be distorting competition.
The BBC's Business Editor, Kamal Ahmed, said the key issue - and an anomaly of the market- is that banking is free. "Free-in-credit banking means that customers lack incentives to move. It also makes it harder for new entrants," he said.
Great. So does this mean that millions of pounds will be spent on an eighteen month investigation, with the end result being that free banking is going to come to an end, and all in the interest of 'helping the consumer'???0 -
Why on earth is it distorting the competition?!
I think it's a result of the competition in the specific UK environment.
Also, the new Tesco account isn't free even if in credit in spite of the alleged lack of competition.
I think it's a very perverted logic to enforce a compulsory fee in order to achieve more switches as a result of people starting looking for cheaper banking. They already have it without any fees!0 -
Yeah this is a load of nonsense. Anyone with two eyes can see there's quite a lot of competition right now, with switch incentives and in-credit interest being offered (to the detriment of dedicated savings accounts, it must be said).
Why do we want to see the end of free banking, like the USA? Have they actually asked the public if that's what they want?0 -
The regulators should be looking at the hurdles it takes to launch a new bank in the UK. If you take banking leaders from existing stock, to launch new banks, you either get reckless criminals or fusty old men. Neither of which is desirable.
Personally, the market that is missed in this country is mid-wealth, in my experience. Take me, household income about £90k a year - no bank has a product targeted to me - I'm too poor for the likes of HSBC and Barclays premium offerings but also consider myself wanting a bit better than a basic first direct account.
Ideally I'm looking for:
- a gold or platinum debit card (black is not the new gold, IMO)
- quality travel insurance similar to Amex Platinum, inc delay cover
- freephone number to call when needed
- airport lounge access
- matching premium gold visa chargecard with no spending limit - the card has to say 'premium' or 'vip' on it
- concierge
- air miles with every credit made to the account
- complimentary cabin upgrade for two, once a year, on BA or AA
- complimentary Regus lounge access, unlimited, worldwide
I think that's about it - so if any bank wants to get competitive and get my money - offer me the above!Never argue with an idiot. Especially not this idiot because I'm always right anyway.0 -
Do you mean made of gold/platinum? And does it really make any difference to you what is printed on it?Ideally I'm looking for:
- a gold or platinum debit card (black is not the new gold, IMO)
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card has to say 'premium' or 'vip' on it
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Or is it just me and it was a joke that I missed?0 -
why are they doing this? the current account market is very much alive with competitive deals.
if you ignore natwest/rbs & hsbc who all just seem like they cant be bothered now they have a large market share.
but santander, co-op, first direct (hsbc), halifax, nationwide and now even lloyds have all got decent deals on offer.
what they really should be investigating is the lack of competition in the ISA accounts market. they seem to have all leveled out at the same 1.5% ish interest apr and none of them are willing to try and entice savers to move elsewhere.0 -
Do you mean made of gold/platinum? And does it really make any difference to you what is printed on it?
Or is it just me and it was a joke that I missed?
Yes, would be nice to be made of gold - but in reality just a shiny card would be nice - they're very hard to come by these days - most banks have ditched the gold card.
It is important to have the correct letters on the card too - I like people to know my status - that's what I love about AA Executive Platinum - people who see the card know I am in the top tier, so to speak.Never argue with an idiot. Especially not this idiot because I'm always right anyway.0 -
Why would I want to leave my bank? They never make mistakes, and comes top on satisfaction surveys all the time, even though nobody ever asked me. Is £50~£100 in interest a year really worth it?
I have opened a Tesco current account just for the 3% interest, but it wasn't a "switch". The good thing is, this provides an expendable account that I CAN switch, to get a 5% Nationwide FlexDirect account for a year. Have to prime it with a couple of direct debits, which is easy. Next time I switch broadband, and a credit card on 0% Balance Transfer that drip feeds the monthly minimum payment will do.
Obviously, not touching the account I really trust.0 -
This made me check the deck of my semi-abandoned cards. Yes, all gold/platinum ones seem to have been replaced with black and other colours, but I haven't even noticed this....in reality just a shiny card would be nice - they're very hard to come by these days - most banks have ditched the gold card.0
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