The Competition & Markets Authority announced sweeping changes to the UK banking industry today. The update to the retail banking sector was driven by an acknowledgement that little competition existed within the retail banking sector and thus consumers were coming up short in regards to services and the benefits of technology. The UK has been at the forefront of empowering Fintech innovation and the UK government has embraced its role as chief enabler. In some other sovereign nations, old school banks battle agile innovators by enlisting regulators and politicians to slow progress and competition. While many banks moan about mandated compliance and extensive regulatory over-reach, they simply pass these costs onto consumers. Smaller innovative Fintech firms do not have the deep pockets to adhere to steep compliance hurdles and thus, ironically, regulations become a barrier to entry protecting high street banks.
The UK is going to change all this. As outlined today, the CMA is enacting a series of profound reforms. The reforms will not only compel banks to change but will also fuel alternative finance providers in their goal to provide better services using technology. You may read about it here. They have also produced a fact sheet as to “what happens next”. It is embedded below.
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