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12 months on from the CMA’s report and consumers have missed out on £10 million and counting – due to a broken banking market

9th August 2017



TSB believes three simple changes can go a long way to make banking better for all UK consumers

The nearly three year long investigation by the Competition and Markets Authority (CMA) into competition in retail banking seems to have backfired.  In the past 12 months since the publication of its final report, the number of consumers switching bank accounts has fallen by 14% – with the average person likely to be £70 better off by switching, that’s a collective £10 million in savings consumers are missing out on. 

The CMA’s attempt to fix the industry and get consumers a better deal has failed and banking is still not working in the interest of consumers.  The big banks continue to have a stranglehold on the market – they are taking customers for granted, trapping them on poor deals and making it impossible to switch. 

CMA infographic

Fewer people are switching than ever before

  • The number of people using the Current Account Switching Service (CASS) has fallen by 14% in the past 12 months1 – that’s nearly 150,000 fewer people switching.
  • Those customers have missed out on a saving over £10 million by not switching banks – according to the CMA’s own research which found that a typical customer could save on average £70 a year. 
  • Only 28% of people have heard of CASS according to research by TSB2 – a far cry from the 75% customer awareness figure which CASS reports1.
  • 47% of people have never switched their current account; a further 23% haven’t switched for more than 10 years2.

So, it’s no wonder that nearly seven in 10 people (68%) think competition in the retail banking industry is worse or just the same compared with this time 12 months ago2

Consumers have been kept in the dark for far too long

“The CMA had a golden opportunity to fix the industry, by enabling consumers to make informed choices about their banking and ultimately putting them in control.  But one year on and its attempt to get consumers a better deal has failed.  People are still missing out on the benefits of switching – to the tune of another £10 million in the past 12 months” says Paul Pester, CEO at TSB – the bank born to bring more competition to the UK.    

Throughout the CMA’s investigation, TSB explained that there are a range of interconnected issues preventing the banking market from operating in the best interests of consumers.  When taken together, these issues have created a market that has been stacked against consumers for far too long: 

1. Consumers don’t know what they are actually paying for their day-to-day banking.  

2. Consumers can’t easily assess whether a competitor product would be better for them.

3. Consumers can’t easily move their bank account – even if they do decide to switch. 

Whilst some people might refer to banking customers as ‘inert’, it’s clear that many consumers are simply ‘trapped’ with their bank due to a lack of knowledge, a lack of informed choice, and a lack of ability to vote with their feet. 

Disappointingly, these issues still exist today – with new research by TSB2 revealing that: 

  • 41% of people believe it’s difficult to make an informed choice when switching.
  • 38% of consumers can’t see any benefits in switching their bank account.
  • 28% of people say ‘all products are the same’.

Putting customers back in control of their banking

Last year, TSB urged the CMA to take action – recommending three simple changes to make the market start working for consumers, and not just for the banks that serve them: 

1. Customers need to know what they’re paying for their banking.  All banks should tell their customers how much they’ve paid each month through a standard format “monthly bill” – banking must be the only industry that doesn’t do this already.  This will not only lead to a greater understanding of banking products for consumers, it will also act as a prompt to shop around for a better deal. 

2. The industry needs to create a solution so all customers can switch their bank account, particularly overdraft users who stand to gain the most from switching – saving £260 a year on average as a heavy user according to the CMA’s research – but are least likely to switch.  This should include a requirement for the industry to provide a standard format “credit passport” which customers can take to their potential new bank.

3. All customers need to be made aware of their right to switch banks.  All banks should be required to promote the existence of the Current Account Switching Service to customers – explaining how switching is easy.

In the CMA’s final report it committed to delivering the spirit of TSB’s credit passport through an Application Programme Interface (API); but this has fallen into the hands of the big banks that are dragging their feet.  The pace of change is too slow and customers have missed out on another £10 million in the meantime because they still can’t switch.  The industry will need to do much more to explain the benefits of open APIs to consumers – only 2% of people have heard of the concept according to research by TSB. 

Elsewhere, the CMA failed to make any strong recommendations to bring real transparency to banking. 

TSB’s mission to make banking better for all UK consumers remains unchanged

TSB will continue to campaign for these three simple changes.  They are fundamental to creating a banking market where consumers can make informed choices about the best bank account for their needs; where consumers can vote with their feet and move bank accounts easily and – ultimately – to a market that works in the interest of consumers rather than in the interest of the big banks. 

Paul Pester, Chief Executive Officer for TSB, says:  “In a truly competitive market, consumers will be offered genuine choice and a level of transparency they’ve never seen before, so they can make informed choices and switch with ease.  Only then will consumers be empowered to vote with their feet and get a better deal.

“As Britain’s challenger bank, TSB will continue to campaign for a standard format monthly bill for all bank account customers, a switching service that works for everyone – including overdrafts users and, for the big banks to make their customers aware of their ability to switch.”


Notes to editors


1Current Account Switching Service switching dashboard data provided by Bacs – published 26 July 2017. 

2YouGov survey conducted for TSB; poll of 2,030 people; July 2017

For more details, see TSB’s Competition Matters report.

About TSB

TSB was built to bring more competition to UK banking and ultimately make banking better for all UK consumers. TSB only serves local customers and local businesses, to help fuel local economies, because communities thriving across Britain is a good thing for all of us.

We have a simple, straightforward and transparent banking model and make clear on our website how we operate and make money. We offer the products and services people tell us they want, with none of the funny stuff people normally associate with traditional banks.

Our five million customers appear to notice: TSB is Britain’s most recommended high street bank and was recently identified as one of the top 10 big companies to work for.

For further information about TSB Bank plc, please visit our website