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  • FIRST POST
    • Former MSE Paloma
    • By Former MSE Paloma 18th Jul 14, 1:33 PM
    • 526Posts
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    Former MSE Paloma
    MSE News: Current account market faces full competition inquiry
    • #1
    • 18th Jul 14, 1:33 PM
    MSE News: Current account market faces full competition inquiry 18th Jul 14 at 1:33 PM
    The personal current account market could face a full-scale probe by the Competition and Markets Authority"...

    Read the full story:

    Current account market faces full competition inquiry




    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.

Page 1
    • grumbler
    • By grumbler 18th Jul 14, 1:49 PM
    • 51,813 Posts
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    grumbler
    • #2
    • 18th Jul 14, 1:49 PM
    • #2
    • 18th Jul 14, 1:49 PM
    ...annual switching levels remain low at 3%.
    ...
    "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."
    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.

    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.
    Last edited by grumbler; 18-07-2014 at 2:57 PM.
    We are born naked, wet and hungry...Then things get worse.

    .withdrawal, NOT withdrawel ..bear with me, NOT bare with me
    .definitely, NOT definately ......separate, NOT seperate
    should have, NOT should of
    .....guaranteed, NOT guarenteed
    • VT82
    • By VT82 18th Jul 14, 2:30 PM
    • 1,052 Posts
    • 896 Thanks
    VT82
    • #3
    • 18th Jul 14, 2:30 PM
    • #3
    • 18th Jul 14, 2:30 PM
    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'???
    • grumbler
    • By grumbler 18th Jul 14, 2:38 PM
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    grumbler
    • #4
    • 18th Jul 14, 2:38 PM
    • #4
    • 18th Jul 14, 2:38 PM
    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!
    Last edited by grumbler; 18-07-2014 at 2:48 PM.
    We are born naked, wet and hungry...Then things get worse.

    .withdrawal, NOT withdrawel ..bear with me, NOT bare with me
    .definitely, NOT definately ......separate, NOT seperate
    should have, NOT should of
    .....guaranteed, NOT guarenteed
    • DragonQ
    • By DragonQ 18th Jul 14, 2:54 PM
    • 2,089 Posts
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    DragonQ
    • #5
    • 18th Jul 14, 2:54 PM
    • #5
    • 18th Jul 14, 2:54 PM
    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?
    • giblet10
    • By giblet10 18th Jul 14, 2:58 PM
    • 488 Posts
    • 183 Thanks
    giblet10
    • #6
    • 18th Jul 14, 2:58 PM
    • #6
    • 18th Jul 14, 2:58 PM
    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.
    • grumbler
    • By grumbler 18th Jul 14, 3:10 PM
    • 51,813 Posts
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    grumbler
    • #7
    • 18th Jul 14, 3:10 PM
    • #7
    • 18th Jul 14, 3:10 PM
    Ideally I'm looking for:

    - a gold or platinum debit card (black is not the new gold, IMO)
    ...
    card has to say 'premium' or 'vip' on it
    ...
    Originally posted by giblet10
    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?
    We are born naked, wet and hungry...Then things get worse.

    .withdrawal, NOT withdrawel ..bear with me, NOT bare with me
    .definitely, NOT definately ......separate, NOT seperate
    should have, NOT should of
    .....guaranteed, NOT guarenteed
    • minislim
    • By minislim 18th Jul 14, 3:35 PM
    • 343 Posts
    • 207 Thanks
    minislim
    • #8
    • 18th Jul 14, 3:35 PM
    • #8
    • 18th Jul 14, 3:35 PM
    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.
    • giblet10
    • By giblet10 18th Jul 14, 3:35 PM
    • 488 Posts
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    giblet10
    • #9
    • 18th Jul 14, 3:35 PM
    • #9
    • 18th Jul 14, 3:35 PM
    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?
    Originally posted by grumbler
    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.
    • Pincher
    • By Pincher 18th Jul 14, 3:39 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    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.
    • grumbler
    • By grumbler 18th Jul 14, 4:16 PM
    • 51,813 Posts
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    grumbler
    ...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.
    Originally posted by giblet10
    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.
    We are born naked, wet and hungry...Then things get worse.

    .withdrawal, NOT withdrawel ..bear with me, NOT bare with me
    .definitely, NOT definately ......separate, NOT seperate
    should have, NOT should of
    .....guaranteed, NOT guarenteed
    • giblet10
    • By giblet10 18th Jul 14, 4:20 PM
    • 488 Posts
    • 183 Thanks
    giblet10
    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.
    Originally posted by grumbler
    Yep, very sad sign of the times..society moves away from being hierarchical so now I don't know who to be friends with - everyone has mixed colour cards now!
    Never argue with an idiot. Especially not this idiot because I'm always right anyway.
  • 101problems
    i think the point has been missed with regards to free banking.
    I agree with the statement as in the states and other countries in europe you pay for just about everything with your bank from transfers to cashing cheques, In the UK these costs are absorbed by the banks which is why they have such high fees for indescretions basically its if you want cheaper fees we are going to be charging you what it costs everytime, as someone who runs my account well and avoids fees and makes money out the bank I say we have a cracking deal!!
    have a read of this, they charge you for using there app!!
    http://www.usatoday.com/story/money/personalfinance/2013/07/07/bank-fees-mobile-services/2480541/
    Last edited by 101problems; 18-07-2014 at 4:28 PM. Reason: adding link
    • Pincher
    • By Pincher 18th Jul 14, 4:29 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    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.
    Originally posted by giblet10
    HSBC Premier £50k total holding

    Barclays Premier £100k total holding or £75k annual income.

    Or do you mean Private banking?

    I think it's like a lap dancing joint. Premier is where they fleece you in view of everyone. Private banking is when they shut the curtains, and really make you pay through the nose, for very little service.
    • ~Brock~
    • By ~Brock~ 18th Jul 14, 4:30 PM
    • 1,610 Posts
    • 1,532 Thanks
    ~Brock~
    I've been with my bank for 27 years and have built up a good relationship with them. Their service to me over the years has been excellent, in my opinion.

    Why the constant regulatory obsession with 'shopping around'? I don't want to move because I am happy where I am.

    I suspect I belong to a silent majority of people who are happy where they are, do not give their banks' headaches with financial mismanagement problems and in return do not have cause for grief or complaint. They can spend fortunes of (ultimately) tax payers money on these reviews but will it really change anything?

    Also, people who are constantly whinging about their bank should often, when pointing the finger of blame, look where their other fingers are pointing.
    • vm2pensioner
    • By vm2pensioner 18th Jul 14, 4:48 PM
    • 131 Posts
    • 66 Thanks
    vm2pensioner
    So does the government want to force people to change, just to create artificial competition?

    A few years back, government encouraged Lloyds to take the poisoned chalice of Halifax / BOS without due dilligence - and we all know what happened to Lloyds shares in the aftermath and the effect on people's pension funds - to create a bigger stronger bank. Then, surprise, surprise, government - prompted by EU - said, oh, bank is too big, so sell off TSB cheap! More losses.

    If the recent meddling with domestic fuel tariffs, where many poorer people / low users have ended up paying more as a result, is anything to go by, government intervention will be a disaster.

    Why meddle?
    • grumbler
    • By grumbler 18th Jul 14, 4:56 PM
    • 51,813 Posts
    • 21,982 Thanks
    grumbler
    Because they have to do something to justify their existence?
    Brussels springs to mind with their endless anti-market directives that do distort the competition.
    We are born naked, wet and hungry...Then things get worse.

    .withdrawal, NOT withdrawel ..bear with me, NOT bare with me
    .definitely, NOT definately ......separate, NOT seperate
    should have, NOT should of
    .....guaranteed, NOT guarenteed
    • vm2pensioner
    • By vm2pensioner 18th Jul 14, 4:57 PM
    • 131 Posts
    • 66 Thanks
    vm2pensioner
    Precisely.
    • GingerFurball
    • By GingerFurball 18th Jul 14, 5:29 PM
    • 950 Posts
    • 894 Thanks
    GingerFurball
    They're right, there's not q lot of competition in the market. But I don't knkw what exactly this watchdog is going to do about it.

    At the end of the day, you need 3 main functions from your bank account:

    1. The ability to receive credits
    2. A debit card to make purchases and cash withdrawls
    3. The ability to make payments from your account, whether by FPO or DD.

    Literally every bank account offers this and every major UK bank offers this service free of charge. There's really not a lot a bank can do in order to differentiate themselves from everyone else in the market.

    The only way to really offer competition would be for banks to start charging for their services. But that would make consumers worse off and would be wildly unpopular.
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    • Caddyman
    • By Caddyman 18th Jul 14, 6:03 PM
    • 341 Posts
    • 218 Thanks
    Caddyman
    I'm afraid I'm another one who doesn't have an issue with the UK banking system. Then again, I haven't been overdrawn for almost 20 years. I have accounts with both Lloyds and Nationwide and I'm very happy with their services.

    I certainly don't want to see the sorts of charges levied that other banks charge around the world:

    http://www.moneysavingexpert.com/news/banking/2012/12/moving-to-australia-is-banking-better-down-under
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