The "big five" high street banks could be forced to sell branches to smaller competitors under Labour plans to impose a cap on their market share.
Shadow chief secretary to the Treasury Chris Leslie said Ed Miliband will set out plans to inject "competition and hunger" into the sector in a speech on Friday.
Responding to a BBC report that the Opposition leader's proposals would include a cap, he told the Radio 4 Today programme: "We have got to give customers more choice.
"This is about change and reform. The Government have fallen short consistently of rising to the challenge of what needs to be done. Sir John Vickers' independent commission also said we need that greater level of competition.
"Ed Miliband will be setting out plans on Friday for how that could be achieved."
HSBC, Barclays, Royal Bank of Scotland, Santander and Lloyds last year accounted for 90% of bank customer and total lending and there is cross-party agreement on the need to boost competition.
Mr Leslie said reform was needed "if we are going to earn our way out of this cost-of-living hold that the country is in and if we are going to help those small businesses get the finance they need to build a better economy."
"We have a situation now where a lot of customers feel as though what's the point of switching because they are all the same," he added.
"It's no wonder people stay with the same bank account longer - apparently you are more likely to get divorced than you are to change bank account.
"We have got to give customers more choice. Fees and charges are too high, there's not enough sense of competition and hunger amongst the banks to serve the customers."