UK Banks could be fined for mistreating customers
In a move which has come about because of a European directive, the Financial Services Authority (FSA) is set to take over regulation of UK payments from the Banking Code Standards Board. The current system is purely voluntary although under the EU directive a statutory system will be put in place which will see UK banks fined if they “fail their customers”. But will this actually work?
While we have seen many toothless regulators attempt to control and dictate the UK financial sector it would appear that the FSA will have substantially increased powers to introduce fines and other penalties for guilty banks. Make no mistake about it, the guidelines are there and the power is waiting to be used as and when appropriate. However, whether the FSA, a regulator already under scrutiny and attracting severe criticism in the UK, will want to fine banks who fail their customers or issue warnings remains to be seen.
There is no doubt that the UK banking system is set to change dramatically in the medium to longer term with more regulation expected and more emphasis on customer support and delivery of services. Whether this will accelerate the move away from “free banking” remains to be seen.
