This week, the Financial Conduct Authority has released new rules that will make it easier for UK consumers to compare banking services.
For the first time, banks will be forced to publish a range of data, from how long it takes to reissue debit cards to customer service waiting times.
Ahead of the introduction of PSD2 one month from now, the shake up of the UK’s banking industry has been a priority for the FCA this year.
This reason behind is this is the worryingly low number of customers who switch banks in the UK’s £16 billion personal and small business account market.
A review from the Competition and Markets Authority found that only 3% of banking customers switched current accounts in the preceding 12 months before 2016, and 57% of consumers had been with the same bank for more than a decade. This suggests are poor level of competition and communication.
“We want to see current account providers competing hard for their customers’ business by offering better service, alongside competition on interest and charges,” said Christopher Woolard, the FCA’s executive director of strategy and competition. “These rules will help people see how their bank compares to others so they can choose an account that suits their needs.”
These new rules implemented by the FCA are designed to “complement” the findings of the CMA survey, which advised that banks continue to determine overdraft limits and suggested that retail banks prioritise investment in technology.
UK Finance, the industry lobby, said that the FCA’s new rules would make it easier for “consumers and businesses to compare the quality of service offered by different current account providers is a great way to encourage customers to shop around,” according to Eric Leenders, UK Finance’s managing director of personal finance.
Payment industry transformation
Sarah Armstrong-Smith, Head Continuity & Resilience at Fujitsu UK & Ireland, responded to the news and said that this is beginning of an “intense structural change” within the payments industry. “For the first time, banks will be forced to publish data on how many complaints and security breaches they have received.”
“With the number of threats continuing to increase exponentially, customer trust has never been so valuable or hard to come by and as such it has never been more important for banks to be open and honest about their security. It is paramount that the industry does not overlook, or get complacent about security or place it in the “too big to fix” category, and instead takes a proactive approach.”
“An increasingly attack-prone environment means that investors, shareholders, customers and regulators will be keeping an even closer eye on how sensitive data is being handled. This also means that authorities and lawmakers have put data regulation at the forefront of their agenda – as seen from the enforcement of the General Data Protection Regulation.”
“After all, banks depend on trustworthiness to attract and retain customers. The implications for this sector of serious data breaches, or of a perception of slackness in looking after data, can very quickly lead to customers fleeing to competitors.”