Page 291 - Bank Case Studies

The first cycle lead simply to increased merger and

acquisition activity that resulted in homogeneity within the

industry.

The second cycle lacked a clear set of legislative or

regulatory tools and most of the online start-ups either

failed or were acquired by incumbents, thus sustaining what

increasingly appeared to be a retail banking mono-culture;

and insufficient competition remained the official verdict on

the sector. (2)

Official policy on retail banking was to encourage

competition, but this was negated by the financial crisis

which saw further bank consolidation.

The third cycle was the post-crisis (2008) ambition to

establish major new “challenger banks”. But these have had
limited success due to capital requirements, market access

and limited brand recognition which limit growth potential

and like the main high street banks are under the same

pressures from shareholders to maximise returns.

A further element in achieving competition, efficiency and

effectiveness is the ease of bank customer account

switching: