Britain’s newest and most powerful financial regulator has pledged to introduce “meaningful” change this year to help new banks steal market share from the ‘Big Five’ lenders who dominate in commercial and retail bank-ing.
The Payment Systems Regulator (PSR) will be formally launched on April 1 and was specifically created to shake up the arcane financial plumbing that handles 75 trillion pounds of money transfers annually, from credit cards to shop payments and cash machines.
The government, other financial regulators and lawmakers want more competition in banking to end the chokehold of Barclays, HSBC, Lloyds, RBS and Santander UK who collectively provide 80 per cent of UK bank accounts.
Payments have hitherto been run, as well as owned, by the industry but will now be supervised by the PSR with a core aim to make it easier and cheaper for new ‘challenger’ banks such as TSB Banking Group (and OneSavings Bank to use the existing payments system owned by the big banks.
“We want to make sure that there is really meaningful change to access and governance, and that means this year,” PSR managing director Hannah Nixon said.
Expectations for change are high as policymakers push for more investment, innovation and resilience in payments systems.