Virgin Money and the Yorkshire Building Society (YBS) are calling for the Competition Markets Authority (CMA) to divide up the “Big Five” in order to create more, smaller challenger banks to boost competition.
Virgin Money and the Yorkshire Building Society (YBS) are calling for the Competition Markets Authority (CMA) to divide up the “Big Five” in order to create more, smaller challenger banks to boost competition.
The younger banking organisations say that too much focus is placed on the biggest institutions, such as RBS and Lloyds, and hint that this is creating an unfair monopoly.
“The Big Five continue to hold an overly dominant market position, with younger customers effectively “sleepwalking” into opening an account with the Big Five,” said YBS.
“It is worth examining the case for future divestments which could reduce concentration levels,” added Virgin Money.
Lloyds recently carved off TSB into a separate high street bank, while RBS is preparing to create the independent lender Williams and Glynn.
Launching these separate entities has cost the banks billions of pounds, but advocates say that it is the most reliable way to make the market more competitive.
Businessman Lawrence Tomlinson, former entrepreneur-in-residence at government’s Department of Business and Skills, echoed these sentiments, saying that “the only effective solution to the anti-competitive structure of the market” is to break up Lloyds and RBS “into their constituent parts”.