CMA launches enquiry into current accounts and SME banking

The UK competition authority has launched an "in-depth market investigation" into both the personal current account and small business retail banking sectors, which could help 'challenger banks' to grow.Having in July said it was looking at whether to probe the sector, the Competition and Markets Authority (CMA) said it remained concerned about the effectiveness of competition in these sectors and decided to launch an enquiry.Its concerns include low levels of customers shopping around and switching between providers, and the difficulties for customers in making comparisons between banks, particularly for complex overdraft charges on personal current accounts.The CMA also said it saw continuing barriers to entry and expansion into the sector, limiting the ability of smaller and newer providers to develop their businesses.It said there had been "very little movement over time in the market shares of the four largest banks, which provide over three-quarters of personal and business current accounts".Chief executive Alex Chisholm said: "Effective competition in retail banking is critically important for individual bank customers, small and medium-sized businesses, and the wider economy."