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Innovation is enhancing competition in the U.K.’s financial market, and that’s paying off for consumers in the form of lower prices and greater choice, the Financial Conduct Authority (FCA) reports.

The regulator said its latest review of the retail banking market found that, while the country’s large banks maintain competitive advantages, this is “starting to weaken, driven by digital innovation and changing consumer behaviour.”

For instance, it reported that fintechs’ share of both retail and small business accounts rose from 2020 to 2021, and that the largest banks saw their market share decline.

“This trend occurred even as large lenders lent proportionately more to microbusinesses during the pandemic,” the FCA said.

Additionally, it reported that “intense competition” in the mortgage business, driven partly by an increased use of mortgage brokers, has benefited borrowers; and that increased adoption of digital innovations by both banks and customers “has also improved service quality and satisfaction, particularly for mobile and app-based users.”

“Competitive pressures and innovation are starting to deliver for retail banking customers, with greater choice, lower prices and more convenient ways to bank,” said Kate Collyer, chief economist at the FCA, in a release.

Open banking, which facilitates secure sharing of customer data with fintechs, is expected to produce further innovation, the FCA said.