Which? calls for the Competition and Markets Authority (CMA) to refer the current account market for a full competition inquiry

New Which? research has found that just 2.0% of people have switched accounts since the new switching guarantee came into effect. And we’ve calculated that even if the numbers of people switching continues to grow at the same rate as recent Payments Council data suggests, only 4.2% of people will switch accounts this year.

New Payments Council data shows that the seven day switching guarantee is failing to transform switching rates with just a 14% increase on the number of switches in the six-month period to the end of March 2014, compared to the same period a year previously.

We want the Competition and Markets Authority (CMA), as promised, to take a hard look at the market and measure it against our seven tests of a competitive market. If the market fails these tests, the CMA should refer the industry for a full competition investigation this year.

We’ve already seen many problems in the current account market with complaints increasing by 8%, and a worrying lack of innovation in products and service. The already concentrated banking sector has become even more concentrated in the last five years, and while it’s good to see new banks entering the market, it’s still too early to say if they can seriously challenge the biggest players.

Consumers also can’t easily calculate charges or compare accounts. The Government has recently responded to our calls to make banks release better data about current account running costs, but this will not be available until the end of this year and will probably be on a limited basis.

In the meantime, we need to see a shake up of competition to make sure this market works for consumers.

Which? executive director, Richard Lloyd, said:

“The Competition and Markets Authority should refer the current account market for a full competition inquiry. Low switching levels and a high level of complaints show the unhealthy dominance of the biggest banks is set to continue and this market is not working in the best interests of consumers.

“Even if the number of people switching continues to grow at the same rate as the Payments Council suggests, we estimate only 4.2% of people will switch accounts this year. Unless we see an injection of much needed competition into the market the major high street banks will continue to have a stranglehold.”


The CMA is currently updating the OFT’s market study of the current account market and consulting on whether to order a full competition investigation (known as a Market Investigation Reference).

The latest complaints data from the FCA shows that complaints about current accounts have increased by 8%, while for most other products they have decreased.

Seven Which? tests of a competitive banking market that works for consumers:

  1. Are firms competing genuinely with better quality, innovative products or are they exploiting consumers’ behaviour?
  2. Are consumers getting a choice of products which meet their needs and offer value for money?
  3. Is there enough clear information about the product for consumers to compare easily?
  4. Are there enough engaged consumers to drive competitive pressure?
  5. Do consumers have everything they need to drive competitive pressure – are there barriers to switching?
  6. Are consumers able to get quick and fair redress when things go wrong?
  7. Are new firms which offer a better deal to consumers able to enter the market and compete on a level playing field?

Note on methodology:

Which? surveyed 4,873 people in February/March 2014, and found that 2.0% of people had switched current account after the 16th September 2013 (the date the new switching guarantee came into effect). The Payments Council data show a 14% year on year increase in the volume of account switches between October – March 2013 and October – March 2014. Applying half of this growth rate (7% to represent the next 6 months) to the proportion of people who have switched, we would then expect a further 2.2% to do so between April 2014 and September 2014. Adding up to a total of 4.2% of all current account holders.

To note: The Payments Council data refers to numbers of switched accounts, not customers. The Which? survey data refers to individuals. No adjustments have been made to account for customers with multiple current accounts.


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