Jon Holt, Head of Financial Services, KPMG UK responds to the FCA’s trio of papers on consumer credit.
Responding to the FCA’s trio of papers on consumer credit, Jon Holt, Head of Financial Services, KPMG UK, said:
“The FCA promised to build a better market for consumers and today’s commitments are another positive step towards that.
“We have become a nation dependent on debt - one in ten UK adults spend between 60-100% of their pay before the end of payday. As interest rates rise, the cost of credit will too, and ever more people may find themselves relying on an overdraft to bridge the gap. Therefore, controlling the cost of unarranged overdrafts could go a long way towards helping some of the most vulnerable in society.
“In the short term this will come at a heavy price for cost conscious banks, but, in the longer term these measures could move us away from a culture of free banking which will boost competition and encourage a new wave of growth in the UK banking market. There will always be a social need for banks to provide a basic bank account free of charge but, those consumers who can will become accustomed to paying a little extra in return for ‘add ons’, for example paying for a paper statement from an online product. Slowly this will build a culture where paying for financial services is the norm and that will remove a significant barrier to entry for new start-up banks. More competition will be good news for the economy, banks and consumers alike.”
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About KPMG in the UK
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 16,300 partners and staff. The UK firm recorded a revenue of £2.338 billion in the year ended 30 September 2018. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.