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Since the Competition and Markets Authority (CMA) launched their investigation into personal current accounts and small business banking in November last year, there’s been much speculation about what their preliminary findings would uncover.

Potential theories included an end to “free in credit” banking or a breakup of the big banks – let’s find out whether these came true.

Preliminary findings

The CMA concluded that competition in the current account market needs some work, with banks not having to work very hard to keep customers. The report revealed that the majority of customers – 57 per cent – have been with the same provider for more than 10 years, while a further 37 per cent have had their accounts for 20 years or more. The report explained this by saying that bank customers fear switching accounts because they believe it to be time-consuming, complicated and risky.

Based on these figures, the CMA suggests that High Street banks should do the following:

• Prompt their customers to review the service they receive by messaging them at certain points, for example if there’s a loss of service or a local branch closes.

• Upgrade Midata - a Government backed service that allows customers to access their banking data and compare their existing deal with others – to make the switching process easier.

• Raise awareness of switching bank accounts by funding an advertising campaign for the Current Account Switch Service (CASS).

• Increase competition by setting up a new price comparison site for small businesses.

Overdraft users in particular are less likely to switch their current account provider, as they’re faced with complex overdraft charges and limited information. Although the CMA reveal that those who regularly go into the red could save up to £260 a year by switching, current account users (who don’t go into the red) could save around £70 a year.

It did go as far as to say that Britain’s big four High Street banks – Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland – will not be split up. The CMA revealed that it believes the issue is the lack of switching rather than the need for more small banks. ‘Free’ accounts are here to stay as well – although, we all know these accounts are only free as long as you’re in credit.

It is expected that the CMA will be issuing their final report of this investigation in April 2016.

thinkmoney Current Account

If you’re looking for an account that doesn’t come with any additional charges, why not try a budgeting account like thinkmoney’s. The thinkmoney Current Account is designed to help you manage your money by separating the cash that you need for your regular bills from your everyday spends. The account comes with a monthly management fee of £10 (£15 for a joint account) but there are no hidden charges – for example, we won’t charge you for any missed or rejected payments or for going overdrawn.

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