The dominance in Scotland of RBS and Bank of Scotland should be broken by establishing new sources of credit for small and medium sized enterprises (SMEs), the Scottish Parliament's Economy Committee has said.
Its report came as the Office of Fair Trading (OFT) warned that over-concentration and barriers to entry in the SME market might trigger a competition investigation, as an 'Alternative Finance Summit' was staged in London.
The Holyrood committee urged RBS to demonstrate that it had fully devolved lending decisions to local managers, and it concluded that the enterprise agencies and Business Gateway needed "a far better knowledge of alternative finance models".
Committee convener Murdo Fraser MSP said: "We need greater competition, and not more of the same, to unlock the potential of thousands of Scottish businesses.
"It is also not good enough for our publicly-funded enterprise agencies to be falling behind on advising business on what other routes of financing are available."
The OFT said that despite changes to banking authorisation, current account switching, and the availability of credit information, business current accounts and loans were still concentrated among a small number of major banks.
It also said: "Barriers to entry and expansion may be contributing to newer or smaller providers finding it difficult to enter and expand their business across the core business banking products."
There were low levels of shopping around and of awareness to alternative sources of finance.
The Competition and Markets Authority would now decide whether a statutory market investigation was justified, the OFT said, and it would examine complaints that some banks were requiring SMEs to open a current account as a condition of borrowing - in contravention of undertakings given in 2002.
The OFT also announced immediate action on complaints from peer-to-peer (P2P) lenders and other new platforms that banks are hindering them by dragging their feet over waiving securities or granting second charges.
Kevin Caley, managing director of business loan network ThinCats, said: "Some banks comply within hours, others can take three to four months."
He added that one major bank had withdrawn a facility from a new lender on the grounds that it "couldn't help competitors", and that all such instances had been reported to the OFT by the P2P Finance Association.
Mr Caley was participating in the Alternative Finance Summit, which heard from leading banking analyst Cormac Leech, formerly with JP Morgan and now Liberium, a prediction that alternative lenders would grab 25% of the consumer and SME market across the US and UK by 2024.
Mr Leech said: "We think P2P will be the Walmart/Ryanair of banking. There is a risk banks will go the way of HMV."
Rhydian Lewis, founder of Ratesetter, said: "People often say we cut out the middle-men but platforms are themselves middle-men, we like to think of ourselves as thin middle-men, and we are raising an eco-system that is going to be very powerful."
He said regulation of the sector from next month would "stop the charlatans", while Ed Wray, founder of BetFair, warned: "The single biggest threat (to the industry) is a rogue operator."
Daniel Rajkumar, founder of rebuilding society.com, which has so far loaned over £1.5m to 25 SMEs, said business trust in banks was "irreparably broken"
Anil Stocker of Market Invoice said platforms set up to offer SMEs e-invoicing and 'cloud invoicing' already held valuable credit and risk data, and were therefore "in a great position" to extend their services.
The CMA will decide on its next move following a compliance review in July.