Bank Body Urges New Help For Challengers
Challenger banks should be aided in their attempts to rival established high street players by effectively forcing public sector bodies to deposit funds with them, a report by the industry's main lobbying group will say this week.
Sky News understands that in a report on competition to be published on Tuesday, the British Bankers' Association (BBA) will promote a package of measures including fair access to the payments system and "proportionate regulation".
A draft press release circulated to banks last week said that the BBA's report would also call for a "levelling of the capital playing field" which currently forces smaller banks to hold significantly more capital against loans than high street giants such as Barclays and Lloyds Banking Group.
The BBA report will be published to coincide with a summit on industry competition, which will include contributions from the Conservative Treasury minister Andrea Leadsom and her Labour shadow.
Political pressure to improve competition on banking is growing, despite the advent of a new seven-day switching system for current accounts.
The BBA is expected to dismiss calls for a move to full mobile phone number-style account portability, saying in its draft press release that "nearly six times as many customers (57%) believe that banks offered them enough choice of products and services than did not think so (10%)".
The lobbying group is also expected to compare the banking industry to airlines and supermarkets, which it will say have benefited consumers through the growth of companies such as easyJet and Lidl.
A swathe of new banks, such as Metro Bank and Aldermore, has emerged in the last three years although none which has started from scratch has gained a significant market share to date.