The Netherlands Authority for Consumers and Markets (ACM) has identified insufficient competition among banks as the primary reason for the low savings rates available to Dutch consumers. According to a recent ACM study, the majority of Dutch savers hold accounts with one of the three major banks—ABN Amro, ING, and Rabobank—and few switch to banks offering higher rates, resulting in inadequate competitive pressure to increase savings rates.

Martijn Snoep, Chairman of ACM, stressed the necessity of legislative intervention to reduce switching barriers and boost market competition. “The results of our study show that competition on the Dutch savings market is not functioning properly at the moment. One solution is lowering switching barriers, making it easier for consumers to switch and benefit from higher savings rates,” Snoep stated. Currently, ACM lacks the authority to implement such changes, which require legislative action.

The study revealed that consumer savings rates at major banks have not matched the rising interest rates set by the European Central Bank (ECB). Although no illegal collusion was found among the banks, the report suggested possible “tacit coordination,” where banks observe and mimic each other’s interest rate decisions. This behavior, while not illegal, effectively results in lower rates for consumers, akin to cartel-like effects.

Several factors contribute to the lack of competition. Many consumers are satisfied with their current banks, while a significant portion is unaware of alternative savings products offering higher rates. Additionally, there is a strong preference for the major Dutch banks and a lack of trust in non-Dutch banks. Switching barriers, such as the complexity of savings products and the mandatory tying of savings and checking accounts, further deter consumers from moving their savings.

To address these issues, ACM has recommended improving transparency of information, prohibiting the tying of checking and savings accounts, and creating a mandatory switching service to facilitate easier transfers between banks. The Dutch Ministry of Finance had requested the study to understand the discrepancy in savings rates, and ACM’s provisional report is now open for public consultation, allowing interested parties to submit their opinions within three weeks.