Watchdog to announce inquiry into big four banks AN INVESTIGATION into the dominance of Britain's big four banks over consumer and small business accounts is expected to be announced today. The Competition and Markets Authority (CMA) will confirm whether it has decided to press ahead with an inquiry into personal current accounts and small and medium-sized enterprise (SME) banking. It has previously said that "it is minded to launch a full-scale investigation," but it has given the big four - Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland (RBS) - the opportunity to come up with their own solutions. Previous studies by the CMA have found that essential parts of the retail banking sector "lack effective competition and do not meet the needs of personal consumers or SMEs." The CMA has been consulting on a provisional decision that there should be an in-depth investigation into the current account market, which generates revenues of more than £8 billion, and SME banking, including the more than £2bn business current account market and business loans. Some 65 million active personal current accounts exist in the UK, while there are more than 3.5 million business current accounts. The big four banks collectively supply more than three-quarters (77 per cent) of the personal current account market in the UK, and the CMA has previously found that, despite moves to make it easier to switch banks, the number of people who actually do so remains low. The big four also account for more than 85 per cent of business current accounts and 90 per cent of business loans. The CMA has said SME switching levels remain low, with just 4 per cent changing their bank every year. The CMA has been inviting views on proposals to remedy the suspected problems in the SME banking sector which have been put forward by Barclays, HSBC, Lloyds and RBS as a possible alternative to a market investigation referral being made. These proposals would involve the banks undertaking to set up a comparison website to improve transparency, as well as establishing new standards around account opening. The CMA said in July that, while it remained open-minded, "we provisionally consider that it would be more appropriate to conduct a full investigation than to accept these proposals." The watchdog, which has been collaborating with the Financial Conduct Authority (FCA) to gather evidence, has not commented on what the decision regarding an investigation will be. The CMA said in July that many customers see "little difference" between the largest banks in terms of the services they offer. It has previously raised concerns that limited levels of transparency mean it is hard for customers to shop around between banks and make comparisons. Overdraft charges on personal current accounts in particular can be "complex." It is also possible that current accounts which are "free" as long as someone stays in credit involve some customers effectively subsidising others, which may also distort competition, it has said.