multitudinous UK consumers are paying more than they should for banking services and not benefiting from technologies in banking because larger and more established banks possess too much power in the marketplace, the Competition and Markets Authority (CMA) said in a report published today.

unlock banking will aid public to manage their cashflow and avoid overdraft charges, and to compare products more clearly, the CMA said.

A framework for an unlock Banking Standard was released in February by the unlock Banking Working Group and backed by the UK Treasury. At the heart of unlock standards based banking is the requirement that banks grant anyone to access data they clutch about their customers, products and services.

Fintech expert Luke Scanlon of Pinsent Masons, the law firm behind welcomed the report, saying that it may build consumers more aware of the options available to them.

“multitudinous customers do not glance to readily grasp how powerful an ability to propel banking data could be. The CMA’s report therefore supports the overall regulatory objective of helping public more easily save and invest by simply creating more awareness about the benefits of unlock banking and unlock APIs,” he said.

“The technology is already there, and this may be the step consumers require to discern how greater control over their data could also aid them gain better access to finance,” he said.

There are silent issues to resolve priorto unlock banking can really be viable, Scanlon said.

“While the CMA’s approach will create greater awareness about the benefits of unlock banking, multitudinous aspects silent require to be addressed including a governance framework, and a liability regime to identify who is responsible when things goaway wrong,” he said.

“We also require to recognise the cost to banks of providing the infrastructure needed for unlock banking,” said Scanlon.

Banks will also be required to publish information on quality of service, so that consumers can compare what is on offer, and to send out prompts reminding customers to check whether they are getting the best worth or should vary banks.

“Unlike multitudinous other financial products such as home insurance, current accounts do not possess annual renewal dates to act as natural reminders,” the CMA said.

The CMA will also introduce measures to build it easier to switch accounts, it said. Currently only 3% of personal and 4% of business customers switch to a varied bank in any year, “despite, for example, personal customers in grand Britain being capable to save £92 on average per year by switching provider, with savings of around £80 a year on average available for small businesses,” it said.

Even larger savings are available for overdraft users who could save an average of £180 a year, the CMA said.

Specific fresh measures will aid unarranged overdraft users, who build up around 25% of personal current account holders. Banks will possess to inform customers when they are seal to going into overdraft and to grant a ‘grace’ period to avoid charges. Banks will also possess to set a hat on unarranged charges and tell customers about this hat, the CMA said.