(14 April 2016 – United Kingdom) In a report released this week, Britain's banking and finance industry watchdog, Financial Conduct Authority (FCA) has said that it wants to end contractual clauses that bind custtomers to a provider for a range of financial services.
The study found cross-subsidies between corporate and investment banking lead to a bundling of services, where customers can end up using the same bank for several products.
“Our study shows that many investment and corporate banking clients are getting a service they want, but we have also identified some areas where improvements could be made,” FCA director of competition, Christopher Woolard, said.
“Overall, this is a package of proportionate measures intended to remove potentially anti-competitive practices,” Woolard said in statement.
The regulator said customers, in return for below cost lending and corporate broking services, are often pressured to “reward” the same bank when it comes to advising on issuing new shares, which can earn the bank a bigger fee.
“The provision of cheap lending and corporate broking makes it harder for those banks providing only transactions services to compete,” the FCA said.