Following the Chancellor of the Exchequer’s speech and the continued debate on the Financial Services Bill in the House of Commons, the All-Party Group on Challenger Banks and Building Societies has published a new report calling for further action to drive competition and better customer outcomes in the UK banking sector.

The report on Diversity in the UK Banking Sector has taken three years to put together based on evidence from a broad range of witnesses.

The consensus was that there was a lack of competition in the sector which was being enforced by a one-size-fits-all regulatory system that needs significant reform. The APPG has made a number of recommendations on how to deliver this; some simple and straightforward, others bold and radical.


Rt. Hon Karen Bradley MP commented:

 “The introduction of the UK Financial Services Bill is very welcome, as is the Government’s admission that it will be the first of many.  This legislation is focussed on delivering the Governments commitments over international rules such as Basel III and putting EU legislation into UK law ahead of Brexit.  There will also be benefits to consumers and UK firms from the Government’s approach.

However, given the importance of the financial services sector to the UK economy, and the systemic challenges faced in the UK, the Government needs to go further.  More than a decade on from the 2008 financial crash, there is still far too little competition in the UK banking sector.  Despite being bailed out at huge public expense, consumer banking in the UK continues to be dominated by the same small cabal of firms deemed too big to fail.

While there are some new entrants to the market, the current regulatory structure makes it impossible for them to compete with the larger players.  The UK regulatory system needs to create a viable pathway for start-ups to challenge the established high street banks.”

I welcome the Government recognition that post-Brexit Britain needs a dynamic, diverse consumer finance sector fit for the 21st Century.  While our regulatory framework has shown great promise in encouraging financial start-ups, it does not yet provide a platform for them to grow and scale into major financial players.  This needs to change and the APPG believes the recommendations in this report will go some way to delivering that.”