Deloitte comments on OFT's call for more competition in current account market
25 January 2013
Deloitte, the business advisory firm, comments on the Office of Fair Trading’s (OFT) call for more competition and innovation in the current account market.
Nick Sandall, lead financial services partner at Deloitte, said:
“It is optimistic to think that market forces alone will bring about the change in current account pricing that the OFT is seeking. Deloitte’s research suggests that competition in the market for UK current accounts is fierce, with banks paying customers up to £200 to switch accounts. Meanwhile, high street banks are also investing in very innovative functionality around mobile access, loyalty programmes and banking applications - most of which are offered free.
“As the OFT’s own findings show, banks will look to recover reductions in penalty fees from other sources. However, one of the last places they will look is in prime, in-credit current accounts, precisely because they value these relationships highly and the market is very competitive. Banks would probably prefer to introduce fee-based banking but they fear that, when offered the choice between fee-based banking and so-called free banking, many customers - particularly financially sophisticated customers – will opt for free banking.”
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