UK Competition and Markets Authority said that 77% of UK personal accounts are under the control of Lloyds, HSBC, RBS and Barclays. Because of the reduced number of choices in the market, consumers could not avoid the bad bank practices and poor services that had plagued the bank.
PPI mis selling is an example of the costly bad practices of the lenders.
According to the Authority, customers are not shifting to lenders with high levels of service. They are to announce a formal investigation into the UK personal current account sector on Thursday. The sector earns £8 billion a year for the UK ‘Big Four.’
The watchdog also said that banks continue to push out smaller businesses by failing to offer loans suitable for their development. While banks have implemented bank switching within seven working days, Richard Lloyd of Which? said that it is not enough.
He said “Quicker switching alone will not solve the lack of competition. It is clear that the big banks’ stranglehold on the market continues and that quicker switching alone will not solve the lack of competition or trust in banking.
‘The Competition & Markets Authority must expose what’s at the heart of the problems in this market and propose reform so that it works better for consumers.”