At a specific date when I’d needed a minimum of £100 in my account, I’d had only £92 as I was paying for driving lessons at the time.  A precocious youth, I wrote to the then chief executive, James Crosby, to vent my frustration, pointing out that learning to drive would help me in my future career choices – it hasn’t – and telling him in no uncertain terms that as a loyal saver throughout my youth, he should give me my fair shares.  Former HBOS chief executive James Crosby Photo: PA  He didn’t. If I remember rightly, he didn’t even reply.  Despite my earlier frustrations, I now bank with Lloyds, into which the Halifax was subsumed during the financial crisis.  I recalled this story – albeit a slightly abridged version – recently when talking to a source at the top of one of the country’s biggest retail banks.  “I’m not surprised,” he said, and shrugged his shoulders. He was right to do so, because even when bad things happen to us, as a nation we just don’t like to change our bank account provider.  A colleague was recently left for seven weeks without a debit card for his main bank account. He is still yet to leave the bank which made the error.  In the past 30 years, the proportion of the population holding accounts with the top four banks has barely altered. Some 77pc of Britons still bank with one of those four – Lloyds, HSBC, Barclays and the Royal Bank of Scotland.  Britain's four largest banks dominate the current account market  To try to reduce that dominance, the Competition and Markets Authority (CMA) has been investigating the sector. That probe is due to come to a close on Thursday morning, when CMA chief executive Alex Chisholm will publish his recommendations on how to increase competition in the current account market. The problem is, however, that whatever he suggests won’t work.  The most likely suggestion – an attempt to bring back charging into the marketplace, as is common in countries such as Australia – is doomed to fail. He has no power to compel banks to charge for accounts, and even if he did, the banks would fight him into eventual submission through the courts.  Instead, the most likely outcome is for Chisholm to encourage the banks to introduce a charge for current accounts, which they’re reluctant to do, and to display so-called “hidden” charges more clearly.  The arguments as to why banks don’t charge for current accounts in the UK are well rehearsed, and date back to 1984 when the then Midland Bank – later bought by HSBC – decided to offer a free bank account to attract customers. It worked – and so the rest of the industry followed suit in order to protect their customer base.  But despite the lack of an upfront charge, the most recent statistics show that the industry managed to make £8.1bn in 2013 from not charging. By delivering so-called free in-credit banking, the banks retain the net credit interest, the difference between what customers earn on their deposits and the income banks make from using that money for other purposes.  Some £3.2bn of the £8.1bn came from net credit interest, with £2.9bn coming from overdraft charges, £1bn from monthly fees for paid accounts, and a further £1bn from the fees card issuers charge retailers for payments.  As such, bank accounts remain lucrative. Yet a significant proportion of the 65m active bank accounts in the UK do not deliver any real profits for the banks, as they are kept in credit only by small amounts.  Could banks make more money from customers? Almost certainly. But would they want to? Probably not. For basic current accounts remain “loss leaders” which work perfectly well.  In essence, what Chisholm will attempt to do on Thursday is walk a very fine line between the status quo and radical reform.  With the new account switching platform proving to be somewhat of a damp squib in encouraging change, there are few easy, workable solutions to the age-old exam question of what to do about Britain’s bank accounts.  Challenger banks are already beginning to make small inroads, and they should be encouraged rather than faced with the prospect of having to pay the Chancellor’s 8pc bank levy.  And for all the talk of companies such as Apple changing how we interact with money, all the products we have or can expect are predicated on one thing: a working bank account.  In essence, although Chisholm’s report will deliver big headlines, in 30 years’ from now, I wouldn’t be surprised if the current account market remains as concentrated as it was 30 years ago.
This week's report from the Competition and Markets Authority into competition   in bank current accounts will change little