REPORT ON OBSTACLES TO THE DEVELOPMENT OF COMPETITION IN RETAIL BANKING SERVICES
PRESS RELEASE
PRESS RELEASE
BANKS: ANTITRUST AUTHORITY CALLS FOR GREATER TRANSPARENCY IN CURRENT ACCOUNTS. IF BANKS DO NOT ACT SPONTANEOUSLY, FURTHER REGULATION REQUIRED.
BANCOMAT SHOULD SHOW ANY ADDITIONAL COSTS
Increasing competition in the Italian banking system should lead the banks to take spontaneous measures to ensure maximum transparency of information for the consumer. If that is not the case, specific regulatory intervention will be necessary to encourage a more informed choice on the part of customers.
This is the substance of a report to the Government by the Italian Competition Authority.
In the report, approved at a meeting on 24 May 2007, the Authority points out that a prerequisite for increased competition in the banking system is customer mobility between banks. In order to facilitate this process, the consumer must have the broadest possible access to detailed information about fees, and the quality and conditions of the services offered. In this way, the customer can choose amongst the various offers, leading to positive effects on competition among the banks.
In order to get this virtuous process started, the Authority suggests introducing, at the time a current account is to be chosen, a summary information sheet that clearly indicates all the account fees and the economic conditions for the most-used services (cheques, setting up of automatic debits and payment of utility bills, money transfers, Bancomat, ATM withdrawals and issuing and use of credit cards). The bank should also provide an indication of the estimated overall cost of keeping a current account for different usage profiles, so that customers can more easily compare the various alternatives the market offers for their own profile. The prices for each service should also include any book-keeping charges.
During the contractual relationship, furthermore, the bank should also inform the customer, at least annually, of the overall cost of the current account and the number and type of operations carried out in the current year and the preceding year, so as to allow a comparison with the conditions offered by competing banks.
Moreover, Bancomat ATMs, at the start of a cash withdrawal operation, should advise if the operation, not being carried out at an ATM of the card-issuing bank, will be subject to an additional charge. The ATM could also furnish customers with other important information about the conditions for the current account.
Rome, 28 May 2007