Their objections follow the CMA’s ‘Retail Banking Market Investigation’ report on 17^th May, which outlined a number of significant changes to improve the retail-banking sector.

Among the proposed reforms was the improvement of online comparison tools to streamline current account switching, setting a maximum monthly charge for unarranged overdrafts and alerting consumers before they enter their overdrafts.

Though he welcomed the findings, Mark Mullen, Chief Executive Officer at Atom Bank, warned that not enforcing the recommendations could render them impotent.

“We are surprised that the monthly maximum charge (MMC) on overdraft fees has not been imposed and that banks will be left to determine this on their own.

“We challenge the very concept of an unauthorised overdraft – if a bank determines to provide monies on demand, then manifestly it has authorised the overdraft request.”

However, the CMA insisted their proposals would improve consumer protection and make banks work to earn their customers.

“For too long, banks have been able to sit back and not work hard enough for their personal and small-business customers,” explained Alasdair Smith, Chair of the Retail Banking Investigation.

“We believe the strong and innovative package of measures we are proposing will give customers the information and tools they really need to get a better deal out of the banks.

“They will also protect those who fall into overdraft from being stung with unexpected fees.”

In 2014, £1.2bn of banks’ revenues came from unarranged overdraft charges.

In response, the CMA claimed that its changes would benefit consumers by approximately £1bn over five years, while overdraft users could save up to £153 each year.

But Mark argued that the CMA findings did not do enough to reform the current overdraft system.

“We are concerned that publication of the effective interest rate on current account overdrafts (including fees) has not been mandated,” he added.

“In our view, big banks are frequently more expensive than payday loan companies, but continue to present themselves as [being] significantly less so.”

Other suggested reforms included requiring banks to inform customers of alternative deals with competitors in order to find out which provider and account offers the best value for them.

Rishi Khosla, CEO of challenger OakNorth Bank, welcomed this suggestion.

“The CMA’s proposals to make it easier for individuals and businesses to compare and switch current accounts, should go some way to improving awareness and shopping around in the market.”

Alasdair claimed that the ability to compare deals would be key to challengers’ success.

“What’s really holding [challengers] back is their ability to highlight to customers how new offerings compare with their current deal.”

However, Rishi also warned that these claims failed to address challenger banks’ greatest obstacle.

“Despite Alasdair Smith’s comments, new banks’ ability to highlight to customers how their offering compares with the current deals in the market is not the issue, but rather the fact that we face significant barriers to compete effectively against the incumbent banks,” Rishi explained.

“New banks such as OakNorth are disadvantaged by the fact that they have to adhere to the same tax surcharge and capital requirements as larger banks, despite posing no systemic risk.

“This coupled with a higher cost of deposits creates an un-level playing field and makes it harder for us to compete.”

Craig Donaldson, Chief Executive at Metro Bank, concurred with Rishi Khosla, citing claims that big banks provide 70% of current accounts and eight out of 10 business loans.

Craig said: “Significantly more needs to be done to break their dominance.

“However, contrary to the CMA’s belief, what is holding new entrants back is not the inability ‘to highlight to customers how new offerings compare with their current deal’, but not being able to compete on a level playing field.

“The CMA is letting the incumbent banks off the hook by failing to provide a meaningful remedy to address the huge disadvantages suffered by challenger banks.”