UK banking must innovate

The Competition and Markets Authority (CMA) has introduced a raft of measures intended to drive innovation across UK retail banking.

Under the CMA’s “Open Banking programme”, banks will be required to share their customer data with third part app developers in order to create a new generation of consumer-facing apps.

In exchange for giving their consent to share this data, consumers could benefit from increased access to information about prices and standards, and let them see which bank would be cheapest for them based on their borrowing habits.

The CMA is also keen to continue the drive towards simpler account switching, as currently only 3% of personal banking customers switch their accounts each year.

In order to make switching more transparent and accessible, the CMA plans to introduce a new regulator, a longer period during which transactions will be redirected automatically (currently three years), and a long-term promotional campaign to encourage more switching.

Whether a CMA-backed campaign can succeed where the benefits and enticements of the retail banks in a low-interest environment struggle to drive people to switch, only time will tell.