A two-year inquiry into British high street bank chains has called for a technological "revolution" and a substantial shift onto mobile in order to promote better competition.
The study, carried out by the Competition and Markets Authority (CMA), concluded that updated smartphone apps that take advantage of the latest mobile capabilities should be available for all banks by 2018.
The reforms being implemented by the CMA are meant to remedy the fact that older, larger banks do not have to compete hard enough for customers' business, while smaller, newer banks find it difficult to grow and break through, despite disruptive technology.
Technology reforms are the centre of the CMA's strategy, focusing on ensuring that customers benefit from advances in technology, with new entrants and smaller providers able to compete more fairly.
The CMA's 'Open Banking programme' calls for banks to implement APIs that make it possible for customer data to be shared on third party apps (following individual consent), enabling easier comparisons between different banks via mobile.
The change will enable third parties to create apps that compare different offerings from high street banks, or tools that manage multiple accounts from different providers.
"We want customers to be able to access new and innovative apps which will tailor services, information and advice to their individual needs," said Alasdair Smith, chair of the retail banking investigation. "Our reforms will increase innovation and competition in a sector whose performance is crucial for the UK economy."
Banks will also be required to publish trustworthy and objective information on the quality of service on their websites and in branches, and send out prompts based on events like branch closures or charge increases to remind consumers to review if they are getting the best value or not.
The reforms were welcomed by the British Bankers Association, but consumer magazine Which? criticised the CMA for not doing more to limit banks' ability to charge fees on unauthorised overdrafts. The CMA has required that banks introduced a Maximum Monthly Charge for overdrafts that includes debit interest, enabling customers to compare accounts, but the limit will still be set by the banks themselves.
The CMA's report found that only three per cent of personal customers and four per cent of businesses switch banks in any year, despite personal customers able to save £92 on average by switching providers.
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