Extract A: Financial Conduct Authority (FCA) report into the UK retail banking market

An investigation by the FCA into the personal current account market concluded that consumers have been missing out on £1.2 billion a year due to high unarranged overdraft fees and low credit interest rates compared to what would be expected in a fully competitive market. It found that 65% of account holders have remained with their primary bank for over 10 years. These customers could save or earn around £250 more a year by switching to a different provider, but consumer inertia remains high.

However, the FCA found no explicit proof of collusive behavior among the 'Big Four' traditional high street banks. Furthermore, digital-only 'challenger' banks have grown rapidly, achieving a combined market share of 15% in personal current accounts.

To stimulate market dynamism and protect consumers, the regulator has promoted measures to open up and increase competition in retail banking. These include:

• the implementation of 'Open Banking', allowing regulated third-party financial apps to securely access customer transaction data to recommend tailored, cheaper financial services and facilitate switching
• the enhancement of the Current Account Switch Service (CASS), guaranteeing error-free transfers of all direct debits and standing orders within seven working days
• a mandatory cap on unarranged overdraft fees to protect vulnerable consumers who struggle to access mainstream credit.