The Financial Conduct Authority is to investigate investment banks in the United Kingdom for interest and anti-competitive practices. It may also focus on the feasibility analysis of several packaged banking products banks normally endorse, including payment protection insurance and packaged bank accounts.
However, analysts speculate that the FCA’s move wouldn’t do much to overhaul, or even change anything in the industry.
The FCA is to invoke new powers that can possibly force banks to stop selling these financial products and encourage transparency about consumer charges.
According to FCA Director of Strategy and Competition Christopher Wollard:
We are not at this stage saying there is definitely a problem here — we’re saying there’s enough to cause us to look more closely.”
However, the FCA made it clear that they didn’t have structural reform as part of their agenda.
The FCA will release its list of focus areas for investigation during the spring. This would also include the “bundling” or “packaging” of loans and revolving credit arrangements. According to the FCA’s research, it has become impossible for consumers to get services and other financial products priced individually, making it hard for them to get value for their money.
According to FCA Competition Unit Head Mary Starks, the “bundling culture” has made it harder for many people to get financing for properties or businesses because there is no individual selection and pricing of products.