The Financial Conduct Authority (FCA) has today launched proposals to help customers make effective comparisons of the service levels available for personal current accounts and business current accounts.
The FCA proposes to require firms who offer personal current accounts and business current accounts to publish service information about:
how long it takes to open an account and have features of the account working, including overdraft facilities
how long it takes to replace a lost, stolen or stopped debit card
how long it takes to give someone access to a personal current account under a power of attorney
how and when customers can carry out various transactions, including making payments or cancelling a cheque, and whether 24-hour help is available, and
the number and type of major operational or security incidents
The proposal is for information to be easy for consumers to access and compare. It will also be available for use by comparison services and others. In turn, the FCA expects to drive increased competition between firms to offer improvements in service quality
The FCA works to promote competition and consumer protection in the retail banking market. This consultation represents one strand of a broader programme of work looking at retail banking which includes action on five recommendations made to the FCA by the Competition and Markets Authority in its 2016 market investigation report into retail banking, including operational performance metrics - the subject of this consultation.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
“Customers tell us they think “all banks are the same” and so they are discouraged from looking for current accounts offering better performance. We know from our consumer research and the CMA’s report that consumers and small businesses are really interested to know about the service their bank or building society offers compared to other firms.
“These proposals represent a step forward, making it easier for consumers to judge whether their bank is offering good service and for firms to see if they are competing effectively against other providers.”
The other recommendations from the CMA aim to encourage consumers to consider their banking arrangements, to increase transparency for overdraft users, to deliver a more competitive market for small businesses and to promote innovation by encouraging delivery of an Open Banking solution that delivers benefits for consumers.
The FCA proposes that performance should be measured quarterly (beginning in April 2018) and published within six weeks of the end of the quarter, and that standing information about service availability should be published and kept up to date. Dependent on the outcome of this consultation, the FCA will aim for the first publication of the information in mid-August 2018. This will coincide with the first publication of the other service indicators that the Competition and Markets Authority is requiring the largest current account providers to publish.
The FCA proposes to require firms to publish information per brand, provided that the brand has more than 70,000 personal current accounts or 15,000 business current accounts. The scope of the rules is aligned with the existing scope of the FCA’s BCOBS), and is limited to accounts held by “banking customers” within the meaning of BCOBS.
The FCA proposes that firms should publish the information on their website. Firms that are part of the Open Banking initiative will also have to make this information available via an application programming interface (API).