23 March 2012
The Financial Services Consumer Panel has called for a new deal for bank customers on international consumer rights day1 with the launch of its new banking paper. Mike Dailly, speaking at the British Bankers' Association (BBA) Complaints Seminar in central London, said there was a once in a generation opportunity to ensure banking was reshaped for the benefit of banking customers.
The Panel believes that regulatory change and the creation of the Financial Conduct Authority (FCA) provides a rare opportunity to ensure consumers are able to access better banking services and dispel the myth that day-to-day banking is free.
We believe the regulator should take forward reforms to create a more dynamic banking market that truly operates in the interest of consumers.2
Mike Dailly of the Consumer Panel commented:
"Fifty years ago President Kennedy called for consumers to have the right to safe products sold on an informed choice basis, within a market with competitive choice at a fair and transparent price. This has become the norm for consumer goods from kettles to cookers, but yet remains elusive in banking services.
All too often, banking innovation is designed not to empower consumers but to exclude choice, lessen transparency and reduce competition. The creation of the new FCA together with the forthcoming Vickers Bill and EU legislation provide a once in a generation opportunity to set out a new deal for consumers.
The Panel has today published its banking paper to start a debate on how banking services can be brought into the 21st Century. Concerted action by Government, new regulators as well as technological change are necessary to ensure consumers don't have to wait another 50 years for Kennedy's vision to be a reality.
Notes to editors
1. On 15 March 1962, President John F Kennedy gave an address to the US Congress in which he formally addressed the issue of consumer rights. He was the first world leader to do so, and the consumer movement now marks 15th March every year as a means of raising global awareness about consumer rights.
2. The Panel believes the new Financial Conduct Authority (FCA) should use its powers to:
- remove opaque charging by requiring transparency on the true cost of the different parts of banking services;
- empower consumers to shop around much more by switching their current account provider without any hurdles or delays;
- tackle cross-subsidisation within retail banking at the expense of financially vulnerable consumers;
- insist banks act honestly, fairly and professionally by bringing an end to the inappropriate incentive structures which reward one-off sales rather than developing long-term customer relationships; and,
- make it easier for new competitors to enter the retail banking market in order to increase consumer choice.
3. Read Mike Daily's speech to the BBA.
4. Read the Consumer Panel banking position paper.
5. See Mike Dailly's biography and photographs.
6. The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
7. The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work is available on our website.
8. Panel members are appointed to serve a maximum of two terms of three years.