The UK Treasury should examine the prospect of making bank accounts more portable, allowing them to be transferred between providers in the same way mobile numbers can be, according to the Parliamentary Commission on Banking Standards.
A new report from the commission, titled Changing Banking for Good, said there is a lack of "meaningful competition" in UK retail banking and customers are the ones losing out.
However, the commission stopped short of recommending a competition inquiry into the UK banking sector, which is dominated by only four major companies comprising of Barclays, HSBC, RBS and Lloyds Banking Group. Instead the commission called for a study of the retail and small business market before a formal inquiry by the end of 2015.
The commission believes more radical reforms to bolster competition may be required if the seven-day account switching service for UK bank accounts, which is due to launch in September 2013 and has required considerable technical overhauls, fails to break the dominance of the 'big four'.
By Asim Shah