Who is paying for whom through their bank account?

We were commissioned by the Financial Services Consumer Panel along with Collaborate Research to undertake a literature review into cross-subsidisation between different groups of consumers holding bank personal current accounts.

We found three potential ways in which cross subsidisation occurs:

• from those who have overdrafts to everyone else;
• from everyone to the (“squeezed”) middle; and
• from those who don’t shop around to those who do.

The Financial Services Consumer Panel then augmented this literature review with other insights to produce a discussion paper that was published today. Our research paper is also available on their website here.

11th September 2014