THE Financial Conduct Authority (FCA) said yesterday it will review competition in investment banking and corporate banking services, citing “unanswered questions about potential conflicts of interest and value for money in this market”.
The watchdog said that limited clarity over price and quality of services may make it difficult for customers to see if they were getting value for money.
Bundling and cross-selling of services could also hinder competition from new entrants, according to the FCA.
The study adds to ongoing government pressure for more competition in banking. Personal accounts and small business banking is already the subject to a full investigation by the Competition and Markets Authority (CMA).
The FCA said its market study was “appropriate” as “the benefit from improvements in the way competition works could be high”.
“The UK is a global hub for investment banking, and this sector plays a crucial role in our economy, helping companies raise capital for investment, expansion and funding ongoing operations,” said Christopher Woolard, director of strategy and competition at the FCA.
“What was clear from the discussions we had with stakeholders and firms was that there are unanswered questions about potential conflicts of interest and value for money in this market,” he added.
The British Bankers’ Association said banks already compete vigorously for new clients every day and London has one of the most competitive markets in the world.