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Fiona Brownsell, CEO and Founder
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We have been asking this question for some time now and the same old answer's keep popping up. It seems that the Telegraph's Jeremy Warner has also been investigating and for us his key finding are:
"Any bank failure is a failure too many, but an environment in which small banks occasionally go bust and have to fall back on deposit insurance is plainly preferable to one in which the whole economy is threatened by the abuses and recklessness of just one or two very large operators. And yet regulators set barriers to entry so high that genuine entrepreneurial and innovative endeavour becomes all but impossible.
A large part of the mischief lies in the payments system, which is run along the lines of an elaborate cartel and is extraordinarily difficult for any intruder to crack. Whether it is use of a credit card, the Bank Automated Clearing System (BACS), the Society for Worldwide Interbank Financial Telecommunication (Swift), or cheque, all transactions will at some stage come into contact with established payment systems, making it impossible for new forms of banking to bypass the often opaque charges and technologies of the incumbents.
By these methods is the banking oligopoly sustained. There is no particular conspiracy against the public; it’s just the way the system works. And it touches all forms of banking. An IPO on Wall Street, for instance, is never going to cost less than 5pc to 6pc of the sum raised, despite apparently cut-throat competition for the business."
Read the whole article here
For a number of years now we have recognized that new entrants to UK banking market have elected not to provision current accounts. That has seemed strange given that everyone needs one. Even more alarming as welfare reforms kick in those applying for the Universal Credit benefit will have to have a current account.
The Social Market Foundation have confirmed our concern in their recently published report “Branching Out: The evolution of retail banking “ .
From our research we know that access to the payments system is an important barrier to entry for our clients, restricting them from offering a complete banking service to their customers.
Tusmor is doing something about this last great barrier to entry so if you are interested please get in contact.