“Challenger banks will welcome that the discrepancy in regulatory capital has been recognised. The current system means that challenger banks may be required to hold more capital against their loans, compared with larger banks.
“While the report falls short of outlining a remedy, it has committed to undertake further analysis, which will be welcomed by the Challenger banks.
“There’s also likely to be some disappointment that much less weight has been placed on concentration and barriers to entry than the Challenger banks might have hoped.
“The fact that access to payment systems, which has been high on the agenda for challenger banks, has been left to the Payment Systems Regulator is no surprise.
“Data is the new oil in banking, and better access to data will bring benefits to the banking sector as a whole and encourage innovation. Steps have been taken in the right direction with MiData, although a more agile and instantaneous comparison platform must be found in order to allow customers to make well-informed decisions about providers.
“Clearly the devil will be in the detail, which is yet to be fully-scoped. This provides a genuine opportunity for challengers to work with the CMA to ensure that the measures are effective, and it will be very important for the CMA to ensure it has adequate time to trial any remedies. Only time will tell the true extent of the impact of the CMA’s suggested measures on competition in the sector.”
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