Customers in Northern Ireland pay more for banking and get lower rates of interest on savings, according to the Competition Commission.
The commission found it difficult to unravel the nature of charges
It has published a report into charges imposed by NI's four main banks.
The commission found there was a "lack of clarity on charges and unduly complex charging structures".
The banks, however, insist they have removed or reduced charges and have worked hard to make customer information easy to understand.
An inquiry was set up in May last year following a so-called "super-complaint" from the Northern Ireland Consumer Council and the consumer group, Which.
Among the complaints were that there are charges levied which are not imposed elsewhere in the UK.
It also claimed that the charges appear too similar across the four banks.
Current account charging structures and practices are unduly complex
Charges described using unclear terminology
Customers believe switching accounts is much more difficult and risky than it actually is
In the present state of market competition, the financial incentives to switch are unlikely to outweigh the perceived risks for most customers
A customer's decision to switch is more often prompted by dissatisfaction with their existing bank than the recognition of a better offer elsewhere
There is a lack of responsiveness to changes in charges or interest rates
The four main banks in Northern Ireland are the Bank of Ireland, Ulster Bank, First Trust and Northern Bank.
Inquiry Group Chairman Christopher Clarke said: "Despite a number of significant recent changes in this market, competition in the provision of personal current accounts in Northern Ireland is still not working for the benefit of customers.
"It's difficult for customers to make comparisons between competing providers due to the failure of the banks to explain sufficiently or fully their unduly complex charging structures and practices.
"It took us many months to understand what the charges are and how they are applied."
He said that during the course of their investigations, three of the four clearing banks in Northern Ireland introduced, or announced that they planned to introduce, "fee-free" banking with no transaction or maintenance charges when the customer is in credit or authorised overdraft.
"However, in many cases this means charges have been increased on unauthorised overdrafts," said Mr Clarke.
Use easy-to-understand terminology and descriptions of services
Provide easy-to-understand explanations of the levels of charges and interest rates and how and when they are applied
Provide on each customer statement information on the bank's charges and interest rates and their application
Give advance notice of charges to customers before they are debited by the bank to a customer's account
Remind customers regularly of their right to terminate their account and switch to another provider
Publish customer switching statistics
Make changes to the switching process, possibly by introducing portable personal current account numbers
Chief Executive of the Consumer Council Eleanor Gill said the report was a "major step forward for consumers".
"The Competition Commission has undertaken a rigorous 16-month investigation into the banking practices of our big four banks," she said.
"What they have decided at the end of that is that there is a lack of competition and it is not working for consumers."
The Ulster Bank said in a statement it was "disappointed" as they believed competition in the personal current account was working.
"Ulster Bank has always gone to great lengths to make its information for customers easy to understand. We are pleased that the commission has recognised this and welcome its focus on transparency in communication with customers," a spokesperson said.
The Northern Bank said the "vast majority" of its customers did not incur any charges on their personal current accounts.
"We believe our charging structures are straightforward, and our customers have in fact benefited from the reduction or removal of a number of fees and charges in recent years," it said.
Bank of Ireland said it believed the commission's investigation "has helped draw people's attention to the wide range of choice available from the 19 providers currently in the Northern Ireland market".
"Having recently announced the removal of transaction and other charges - which will apply automatically to all new and existing customers - we have also taken an initiative to proactively inform our customers of how to avoid charges for unauthorised borrowing," it said.
First Trust Bank said it looked forward to engaging with the Competition Commission "to debate the effectiveness and practicalities of the remedies under consideration".
"We also note that it is proposed that these are applicable to all the banks in Northern Ireland (clearers and non- clearers)," First Trust said in a statement.