CMA banking review pushes up banks’ share prices
Shares in the UK's largest lenders rose this morning, after the Competition and Markets Authority (CMA) published its "shake up" of the UK's banking sector.
Shares in Barclays were up two per cent at 160.6p in lunchtime trading, while RBS rose 1.9 per cent to 188.2p. Meanwhile, Lloyds and HSBC both edged up 0.5 per cent, to 54.8p, and 539.9p respectively.
Alasdair Smith, chair of the investigation, said its central reform will be the Open Banking programme, which will allow personal customers and small businesses to share their data securely with other banks and third parties, as well as enabling them to manage their accounts with multiple providers through a single digital app.
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"We want customers to be able to access new and innovative apps which will tailor services, information and advice to their individual needs," he said.
The Open Banking standard is one of the CMA's three "cross-cutting foundation measures" aimed at increasing competition between banks – the measures "have the object of increasing customer engagement and making it easier for personal and business customers to compare the prices and service quality of different providers and of encouraging the development of new services".
The regulator also plans to make improvements to the Current Account Switching Service (CASS), and change the rules around personal current account overdrafts.
In addition, the CMA is introducing a set of measures "targeted at the specific problems in SME banking".
The watchdog had initially planned to release the report in March, but then pushed the deadline back in order to properly consider the responses to its preliminary findings.
"The reforms we have announced today will shake up retail banking for years to come, and ensure that both personal customers and small businesses get a better deal from their banks," said Smith.
"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."
An overview of the CMA's retail banking reforms (Source: The Competition and Markets Authority)