Tuesday 13 September 2011
The end of Free Banking in the UK - pre 2019?
Of course, the truth is somewhat opaque, but it is likely that the retail banks, which are in themselves profitable are able to make enough money from charges and the sales of ancillary products such as credit cards, insurance and mortgages to cover the costs of offering free current account banking.
However, the new regulations will indeed increase their cost of capital and so require profits to be found elsewhere - thus the sights are going to be firmly set on cutting free banking.
Sadly, this will be unpopular amongst customers - indeed this is the sole reason we still have this product in the UK. Now though the Banks are going to be able to blame the Government and new regulations, so it won't be their fault at all.
Therefore the end is in sight for free UK Banking on current accounts? But the new regulations won't be fully implemented until 2019 - so how long before the moves towards ending free banking start. I will be surprised if it still exists in 2015.