Report Examines Bank Account Mobility In Europe

by Ulrika Lomas, for LawAndTax-News.com, Brussels

07 June 2007

The European Commission on Tuesday published the report of the Expert Group on Customer Mobility in relation to Bank Accounts.

The group was established in May 2006 to identify obstacles that customers encounter when switching bank accounts at national or EU level, or when opening bank accounts cross-border, and to provide the Commission with recommendations on how the identified obstacles could be addressed.

The report published this week will assist the Commission in shaping its policy decisions in the area of customer mobility with regard to bank accounts.

It is also an important contribution to the Commission's current efforts to improve retail financial services for EU consumers, as set out in a recent Green Paper.

Internal Market and Services Commissioner Charlie McCreevy explained that:

"Customer mobility is a key factor in boosting competition in retail financial services markets. I am pleased to see that the Group's report contains a rich pool of ideas on how customer mobility in relation to bank accounts could be improved. The Commission considers the Group's report as a very important contribution in the preparation of its own policy decisions in the area."

The Group consisted of experts with banking industry, consumer and academic backgrounds.

Four main obstacles to switching bank accounts were identified in the report, namely:

• Information asymmetry and non-transparency of prices;
• Administrative burden;
• Bundling and tying; and
• Closing charges.

As far as opening of bank accounts is concerned, the Group identified legal and regulatory barriers, information barriers, uncertainty about the rules to be applied, commercial decisions by banks and closing charges as causing problems for consumers.

In total, the Group issued 37 recommendations, addressing all of the obstacles identified.

The report also covered a number of issues that the Group considered relevant to the discussions on customer mobility, such as future developments in payments market, consumer behaviour and bank strategies.

As a follow-up to the Group's work, the Commission is opening a public consultation on the Group's report. Stakeholders are invited to comment by 1 September 2007.

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