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Banks make billions from reluctance to switch current accounts PDF Print E-mail
Wednesday, 05 August 2015

Following Tesco Bank’s report into the real cost of “free” bank accounts, Rich Wagner, CEO and founder Advanced Payment Solutions (APS) and board advisor to the Emerging Payments Association, argues that banks will struggle to shift business models, should the Competition and Markets Authority (CMA) report demand this. He argues FinTech players will gain a competitive advantage.

Mr Wagner says: “It is no surprise many banking customers have no idea how much their so-called “free” traditional bank account costs. The word “free” is misleading – in reality, banks rely on stealth charges and punitive overdraft fees to make current accounts profitable.

“We can expect increased pressure on banks to straighten out these covert practices as we await the results of the CMA report. However, after three decades of operating in this fashion, banks will struggle to shift business models. As a result, the tables will be turned in the finance industry – FinTech players who have laid their foundations on transparency and simple costs from day one, will gain a competitive advantage.”

(Source - APS Comment)  

 

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