As the Office of Fair Trading announced that there is minimal consumer choice within the banking market now the Post Office has to provide current accounts.
According to researches of the OFT about three-quarters of the current market is dominated by Lloyds, Barclays, RBS and HBOS and the chance that customers switch to another bank is not big at all.
The Post Office answered that they have planned to introduce a current account which will offer “simplicity, transparency and good value for money”. It is interesting whether they will sign a partnership agreement with other financial organisation.
Its supplier will be the Bank of Ireland, which already provides savings accounts, insurance policies and mortgages through the Post Office.
Another advantage of the Post Office is that people have the possibility to use their bank accounts and deposit money elsewhere.
However, some banks are not on board with this so not all the customers may use this service.
Post Office did not give any further information about the changes in the interest rates
and whether or not there would be any fee for the service.
In about few weeks the first accounts of this type are about to be rolled out but it will not be until next year that the service is going to become popular and widely spread.
Some supermarkets tried to challenge the entrenched power of the current financial institutions introducing their own banking services. Statistics, however, show that not many of them managed to break down the barriers.
We may only wait to see what the results of the latest offering of Post Office will be.