More competition needed in banking, says committee

The Treasury Committee has published its long-awaited report - Competition and Choice in Retail Banking - this month and called for more rivalry in the industry in order to benefit consumers.

According to the group, the pre-conditions that are required to promote effective competition are not currently present, while the difficulty customers experience when it comes to switching was highlighted as a particular issue.

In addition, the collective noted that a lack of price comparability and transparency within the area of personal current accounts is problematic.

Andrew Tyrie, chairman of the body, said: "The chief executive officers of the large [retail banking] incumbents told the committee [that] UK retail banking was enormously competitive, but a far larger range of witnesses described the industry as close to an oligopoly."

He added that the government needs to do more to prioritise competition in the way it regulates the industry.

As a result, he recommended making this a primary objective of the Financial Conduct Authority (FCA) once it is introduced.

The FCA will be one of the regulatory bodies overseeing people with finance jobs in London and elsewhere in the country and will replace the current tripartite model.

Commenting on the report, the British Bankers' Association noted that it supported competition within the sector as it delivers consumer benefits and is the best driver of cost efficiency and innovation.