The Competition and Markets Authority (CMA) has recommended a full competition inquiry into banks.
The analysis is said to possibly disrupt the five big high street banks and the provisional decision recommends a full scale inquiry into the banking sector, including the provision of current accounts and business lending.
The process will start with a consultation and the CMA will make a final decision in the autumn.
Alex Chisholm CMA chief executive said: "There are a lot of under-satisfied customers out there, and small businesses are saying they are not happy."
The CMA said many customers saw little difference between the largest banks in terms of the service they offer. The inquiry also found the number of consumers shopping around and changing banks stayed relatively low, at just 3% a year for personal accounts.
The banking industry said they will cooperate with the review.
Anthony Browne, chief executive of the British Banking Association said: "Banks are pro-competition - they compete for customers every day.
"Last month we published a series of ideas to help new banks set up and smaller players to grow. We hope these suggestions will be taken up by regulators and politicians."
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