These apps will show customers which banks may offer the best account, based on their own borrowing patterns. Banks will also have to set maximum monthly fees for unarranged overdrafts. However the CMA decided against a cross-industry cap, leaving individual banks to set their own charges, bbc.com reports.
Under what the CMA calls its Open Banking programme, banks will be required to make it possible to share customers data on new apps. Individual customers will have to give their consent before this happens. It will enable customers to see information about prices, standards and the location of High Street branches. Above all it will allow consumers to see which bank is cheapest, given their particular pattern of borrowing.
All the banks will be required to introduce a Maximum Monthly Charge (MMC) - set by themselves - to limit the costs of an unarranged overdraft. The MMC will include debit interest - typically charged at up to 20% a year - and unpaid item fees.
The CMA also ordered new measures to encourage more people to switch their accounts to other providers. Only 3% of personal customers move their accounts each year. As a result there will be a new regulator to oversee the Current Account Switching Service (CASS).
There will be a longer period during which transactions will be redirected from the old account to the new - currently set at three years. And there will be a long-term promotional campaign to encourage more switching. Banks will also be required to send customers text alerts, whenever they go overdrawn - something which most banks already do.
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