Regulation

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Across the globe, the financial services industry is being subjected to increasing regulation. While the pace and form of regulatory change may vary by geography and country, recurring themes include the need for transparency and the facilitation of greater competition.

Regulation is a big issue in retail banking. The impact of fees and charges on consumers is constantly in the media spotlight, which means retail reform often leads other banking areas. To that end, we are witnessing a strong drive to add greater transparency with consumers.

UK Office of Fair Trade compliance

For example, in the UK, the Office of Fair Trading (OFT) is pushing retail banks to become more customer-focused, by offering products that are well-suited to customers needs and making it easy for customers to make informed decisions about how they consume banking products. Ultimately, the desired outcome of these efforts is to continue to drive competition and more choices to consumers.

For example, to address complex charging structures and allow consumers to compare products more easily, the OFT instituted a requirement that all Personal Current Account (PCA) holders be given an annual breakdown of fees and charges for the preceding 12 months.

Fact Facts: UK’s Personal Current Accounts (PCA)
  • Cornerstone of UK’s retail finance system
  • Essential service for UK consumers
  • Approximately 76 million PCAs in UK, of which 61 million are used regularly
  • 94% of UK adults have at least one PCA, while 40% have more than one
  • In 2010, PCAs accounted for £8.8 billion in revenue – or £139 per account – for bank providers
  • PCAs have become highly concentrated, with the UK’s four largest providers holding approximately 75% of the market

From the OFT’s perspective, these initiatives allow consumers to have the right information available, in an easily digestible format, in order to help them understand the true cost of running their account and manage it more effectively.

Armed with this information, consumers would become more confident in switching banks as a means of getting better service. The new Current Account Switch Service from the UK’s Payments Council, effective as of September 2013, makes it even easier for consumers to switch PCA providers by mandating free account transfers within seven business days. As a result, PCA providers need to offer more competitive products and innovative services to attract and retain customers.

miRevenue for Retail Banking: Regulatory compliance

By orienting around the client relationship, miRevenue enables retail banks to manage products, pricing and billing holistically. Designed and built specifically for the financial services industry with modern, enterprise-grade architecture and a focus on revenue enhancement, miRevenue delivers suitable products to eligible clients at the right price – creating conditions for lasting loyalty.

With miRevenue as a strategic relationship based pricing and billing platform, one UK-based Tier 1 bank approached OFT compliance as a driver for greater data transparency, but also as an opportunity to create a strategic competitive advantage.