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CMA should have gone further to help reshape the UK banking industry

09-08-2016 | Today the Competition and Markets Authority (CMA) released its final report into its retail banking market investigation.


Triodos Bank welcomes the intention of the CMA to reform retail banking, to improve competition and get a better deal for customers. However, we think the CMA investigation could have gone much further in its attempt to improve the banking sector.

Measures that ensure greater transparency and fairness in the banking sector are a good thing, including on the punishing charges many banks impose on some of their customers for products and services such as unauthorised overdrafts, which ultimately help subsidise 'free if in credit' personal current accounts, but the report leaves it to the big banks to decide what is appropriate.

As one of the UK's leading sustainable banks Triodos Bank is showing that banking can be a force for good in society and that transparency and fairness should not just be an add-on to how a bank operates but rooted in its values and principles.

Commenting on the CMA report, Huw Davies, Head of Retail Banking for Triodos Bank UK said "For over 20 years Triodos Bank in the UK has been not only a challenger bank but a challenging bank - challenging the way banking is done - showing it can be fair, transparent and help support a more sustainable and resilient society. We believe the CMA should have gone further to help reshape the UK banking industry, but we hope that changes resulting from today's report can at least help make bank customers more aware and engaged in how their bank operates, not only in relation to charges and choice of services but also more critically a step towards customers questioning what banks actually do with their money, in turn customers being more conscious about where they choose to save and invest."

As an established sustainable challenger bank Triodos Bank wants to see more action to provide more transparency, more choice, and more fairness in the UK current account market, which we believe is dysfunctional and is dominated by a small number of large banks. The UK free if in credit current account banking model (an anomaly when compared to much of Europe) is subsidised by penalty charges and fees which can be hidden or excessive. We believe that a more sustainable model would be a flat charge for the provision of banking services, to cover, at least in part, the costs of offering a current account, alongside penalty charges which are transparent and which broadly reflect the costs to the bank.

Real change is needed in the banking sector. Changes that challenge big established banks - not only on things such as fairer charges and greater choice for customers, but change in the mission and purpose of banks themselves. We want to see changes that will directly benefit the environment and society. Today's report represents only small steps of what needs to be done but giants leaps are required to improve the banking sector. Customers of Triodos Bank have already made their choice on how they want their money to support a fairer society and we welcome more people to join our community which is creating a movement for positive change.

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