MORE radical action is still needed to shake up the £16 billion current account and business banking sectors, according to campaigners and finance bosses, who said the competition watchdog's proposals could have gone further.

After an 18 month inquiry, the Competition and Markets Authority (CMA) has stopped short of recommending a break up of the banks.

But it said customers should be prompted to change providers if their branch closes or they are overcharged.

The CMA concluded that competition in the market is not working properly.

t said that the majority of consumers - 57 per cent - have stayed with their provider for more than 10 years.

And 37 per cent have had their accounts for more than 20 years.

Only 3 per cent of customers switched in 2014, the CMA said.

Jayne-Anne Gadhia, chief executive at Virgin Money said: “We welcome the report from the CMA today but believe its provisional findings do not go far enough to transform such an important market. It is estimated that interest foregone cost customers over £3 billion in 2013 and we would like to see all banks being required to pay net credit interest on current account balances.

"If the CMA made the banks pay interest on current account credit balances at a fair market rate it would drive a more level playing field and cause banks to more carefully consider the charges they make for current account products and give customers a better deal.

"Virgin Money is always pushing for greater competition in the banking market and a better deal for consumers and we will continue to engage with the CMA over the next six months."

The Competition and Markets Authority (CMA), which released its provisional findings of a probe into the dominance of the big banks in the sector, found that 57 per cent of consumers have been with their account provider for more than 10 years and 37 per cent for more than 20 years.

Bank customers fear that switching their current account to a new bank will be complicated, time-consuming and risky, the CMA said.

The CMA found that customers with an overdraft are less likely to switch their personal current account than other users.

Heavy overdraft users in particular could save themselves up to £260 a year if they switched, the investigation found, while on average current account users could save £70 a year by switching.

It said that overdraft charges are "complex" and information on product service and quality is limited, making it hard for customers to compare products.

The CMA also said there is a particular problem with SME (small and medium enterprise) customers opening their business current accounts (BCA) at the same bank where they have their personal current account, then sticking with the same bank for their business loans.

It said the lack of competitive pressure in SME banking is highlighted by the fact that more than 50% of start-ups looking for an SME account choose the bank with which they have a personal current account, over 90% stay with their BCA when the initial free banking period comes to an end, and around 90% then go to their BCA provider when they are looking for business loans.

Potential remedies being suggested by the CMA to help include:

:: Requiring banks to prompt customers to review the service they receive from their bank through receiving individual messages at certain "trigger points". These could include a loss of service, closure of their local branch, unarranged overdraft charges or a change in the terms and conditions of their account. In the case of SMEs, a key trigger point could come at the end of free banking periods.

:: Making it easier for consumers and businesses to compare bank products by upgrading Midata, a Government-backed online tool that allows consumers to access their banking data from their bank and compare their existing deal with other accounts which may suit their personal needs better. An improved Midata could have a "radical impact" on consumer choice in retail banking markets, the CMA said.

:: The creation of a new price comparison website for SMEs - currently nothing effective exists to fulfil this role, the investigation found.

:: Requiring banks to help raise public awareness of, and confidence in, switching bank accounts, through increasing their funding for a widespread and sustained advertising campaign.

:: Requiring better sharing of information with credit reference agencies, banks and financial advisers - making it easier for SMEs to shop around for loans and cutting out the need for multiple application form-filling.