Business banking news review: week ending 6 Nov 2014
High Street banking providers have been singled out for a major new investigation into industry practices by the Competition & Markets Authority.
For decades, High Street banks have had a practical stranglehold over the current accounts and savings accounts of British businesses and individuals. Personal and business bank account providers like HSBC, Barclays, Royal Bank of Scotland and Lloyds have more than 75 per cent of the national market share yet they’re almost universally reviled by consumers for poor customer service and awful banking deals, something the Government watchdog is going to delve into in detail.
Big banks make some £8 billion off the personal current account market every year in fees and charges, many of which are seen as unjust and unfair by their customers. Despite this hardly any banking customers are taking their cash elsewhere to better banks, and the Competition & Markets Authority thinks that the Big Four are meddling with the banking market in order to discourage consumers from doing so.
For what it’s worth, there does seem to be much less competition today than as there was several years ago. After the credit crunch and the resultant worldwide economic flameout – incidents that are still reaching through time to affect global economies to this day – the number of banking brands that were gobbled up by the surviving big banks were quite high; the Octopus-like Lloyds swallowed Halifax whole, after all, and several other banks either shuttered or were absorbed into larger entities.
Sure there are some newcomers to the market, but it’s been exceedingly hard to break in. Tesco Bank and Metro Bank are making inroads, and the recently spun-off TSB seems to be providing some competition as well. But still it’s not enough. Making matters worse is how High Street lenders have been absolutely refusing to offer business loans to SMEs for what feels like forever, instead making the decision to sit on their deposits like hens terrified of their eggs being stolen.
I swear it’s enough to make a bloke just start stuffing his mattress with banknotes and be done with it. That’s obviously not a good decision in the long run when it comes to security, but at least I wouldn’t have to worry about an overdraft fee if I try to take a few quid out from under my pillow now would I?