In 2014, the UK's Competition and Markets Authority board began a market investigation into the supply of retail banking services to personal current account customers. It has now published its findings and recommended some legislation and new regulatory policy.

The iniquiry also looked at how banks served the small-to-medium-sized enterprise sector, which need not concern us here.

This is the latest in a long line of reviews of the banking sector, the others being Sir Donald Cruickshank’s review of retail banking in 2000, the Independent Commission on Banking chaired by Sir John Vickers in 2011, and the Parliamentary Commission on Banking Standards in 2013. These reviews led to the founding of the Payment Systems Regulator or PSR and the current account switching service or CASS; the ‘ring-fencing’ of the retail banking businesses from the riskier parts of banking (due to happen in 2019); and the setting of a primary objective to promote effective competition for the Financial Conduct Authority. The study notes that Internet banking has doubled since 2007, with more than half of customers banking online and around a third of customers using mobile banking applications.

One initiative, coming soon from the CMA, is to order banks to make a prominently display of a number of core indicators of service quality. The CMA's preferred measures of quality are based on customers' willingness to recommend their banks to friends, family or colleagues. The Financial Conduct Authority is going to collect data twice a year on a standardised basis at the CMA's behest, so that customers can easily compare banks with one another.

The CMA is going to require banks to collect and publish a wider range of additional quality measures and make them available, alongside the core indicators, through open application programming interfaces to intermediaries which can use them in new kinds of advisory and comparison services. The FCA is best placed to 'work with' (i.e. badger) banks to develop new measurements and enshrine them in IT, and the CMA is making a recommendation to that effect.

The CMA is worried about the ‘evergreen’ nature of current accounts whose contracts have no end date. As is not the case with other things, most customers hold a bank account for many years without ever being prompted to make a conscious choice about whether to continue or switch providers. The CMA's remedy for that is to force banks to send customers occasional reminders or ‘prompts’, at suitable times, to encourage them to consider their current banking arrangements and shop around for alternatives. Some prompts might hinge on specific events that affect the customer such as the closure of a local branch; others might be periodic, such as a reminder included in an annual statement.

Behavioural economics, a subject in which the FCA has expressed plenty of interest already, has influenced the CMA's reform plans considerably. In a number of areas it is therefore recommending the use of research about customers that includes 'randomised, controlled trials,' a phrase it never defines. It wants the FCA to conduct such trials on its own initiative and then to use them, among other things, to update the 'prompts' once the first of those are up and running.

The CMA is also recommending that the FCA should identify, research, test, and possibly act to increase customers’ awareness of and influence over overdraft usage and charges; to assess the effectiveness of monthly maximum charges for unarranged overdrafts - a policy on which the CMA is insisting; to think about requiring the providers of personal current accounts to promulgate online software that points out the eligibility of customers for overdrafts; and to look at ways of inducing customers to pay more attention to overdraft rules during the account-opening process.