The Competition Authority (AdC) will launch an inquiry into retail banking in Portugal to assess competitive conditions in the banking market, according to a statement on the regulator’s website.
The market consultation aims to identify difficulties in comparing banking products, challenges in contracting banking products, and obstacles for customers switching between banks, as well as potential barriers and limitations to competition in the financial sector.
With this consultation, the AdC seeks to define measures to address the identified issues in the sector.
“Retail banking is a sector prone to mobility barriers, given the potential difficulties in researching and comparing different banking and/or financial products, as well as potential challenges in the account-switching process. In situations where banks have a less mobile customer base, competitive pressure is reduced and banks’ incentives to increase deposit remuneration are likely to be diminished,” the AdC statement reads.
Regarding deposit interest rates, the AdC notes that rates on new term deposits of up to one year for individuals in Portugal “remain less attractive than the eurozone average, and term deposit offers are particularly less appealing in the case of the five largest banks.”
