Banking customers could avoid being stung by overdraft charges by instructing apps to automatically move their money around for them, under a watchdog’s plans to shake up the sector “for years to come”.
The Competition and Markets Authority (CMA) unveiled a package of measures to help customers to shop around to get a better deal, after finding older and larger banks do not have to compete hard enough for customers’ business and newer and smaller banks find it difficult to grow.
As part of the plans, banks will be required to speed up advances in technology by putting “open banking” in place by early 2018.
People and small businesses will be able to manage the accounts they hold with several different providers on one single app.
This could mean, for example, that rather than having to constantly check their bank account themselves to avoid going in the red, someone could pre-instruct their app to move money from another provider into their account if they are about to go overdrawn.
Automatically moving money about in this way could help customers avoid unwittingly being hit with charges.
Holding the information about how someone banks in one place could also make it easier to find the deal that best suits their needs, the CMA said.