Big banks have a two-year deadline to scale up technology

Larger banks have had the biggest slice of the retail banking pie, prompting concern over the lack of a fair environment

Banks are also required to provide information that will make it easier for customers to switch bank accounts for a better deal, as well as set ceilings on charges for going into their overdrafts.

The Competition and Markets Authority (CMA)’s new report outlines a series of measures to boost competition and level the finance playing field for smaller lenders.

“We are breaking down the barriers which have made it too easy for established banks to hold on to their customers. Our reforms will increase innovation and competition in a sector whose performance is crucial for the UK economy,” Alasdair Smith, chair of the retail banking investigation at the CMA commented.  A single app to manage loans and cash flow

As a priority, the CMA has outlined a requirement for banks to implement Open Banking by early 2018. This technology platform will offer personal customers and small businesses to share their data securely with other banks and with third parties.

SMEs can essentially manage their accounts with multiple providers through a single digital ‘app’, to avoid overdraft charges and manage cash flow, as well as to compare products on the basis of their own requirements.

Understandably, challenger banks and alternative finance providers are unanimously jubilant at the prospect of competing with the high street heavyweights in cornering the SME finance market.  Read more……