The UK’s Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) on Wednesday launched their New Bank Start-up Unit aimed at encouraging new “challenger banks” to take on the big four of RBS, Lloyds, Barclays and HSBC.

The UK government is keen to boost competition in the banking sector, where the big four have control of more than 70% of UK current accounts.

The New Bank Start-up Unit will help new banks enter the market and assist them through the early days of authorisation.

It will provide new banks with the information and materials they need to navigate the process to become a new bank.

“The New Bank Start-Up Unit builds on the work we have already done to reduce the barriers to entry for prospective banks, which has led to twelve new banks now authorised since April 2013,” said Andrew Bailey, chief executive of the Prudential Regulation Authority.

“These new banks are a key part of bringing innovation to the sector, particularly where there is a gap in the market – whether it is the service they provide, the customers they target, the products they sell or the technology they use.”

Tracey McDermott, acting chief executive of the FCA, said: “Increasing competition in the banking sector is important for consumers and the new unit will offer firms an accessible way to find the information they need to get themselves authorized.”

Harriett Baldwin, Economic Secretary to the Treasury, said: “A key part of our long term plan is to boost competition in banking, driving the industry to offer the best possible products and services to customers …

“Building on the three new banks that have already established this Parliament, this unit will help to stimulate even more competition and diversity in Britain’s banking sector.”