The mutual trade body has consequently announced it has commissioned Oxford University to establish a diversity index to measure the level of diversity in UK financial services markets over time.
The index will measure a number of factors - such as ownership structure, size and geography - across the UK mortgage, savings and current account markets.
It will also provide an overall measure of diversity in each of these markets. It is intended the research will be published this winter, with the index then updated annually to assess how diversity is changing.
Adrian Coles, BSA director general, said: "Today's report makes an important contribution to the debate on diversity in financial services.
“A diverse financial system is better able to weather the strains of the business cycle and the government has rightly committed to a more competitive banking industry by fostering diversity. We urge them to take on board fully the recommendations of the all-party group of MPs.
"The independent diversity index which the BSA has commissioned Oxford University to develop is intended to assist the government in meeting its commitment to promoting diversity, and should be of interest to all those with an interest in a healthy and robust financial services sector."
The BSA also welcomed government support for promoting mutuals. The all-party parliamentary group for building societies and financial mutuals today set out recommendations as to how the government should deliver its coalition commitment to foster diversity and promote mutuals.
Following a short inquiry, which included evidence sessions with the chief executive of the Financial Services Authority Hector Sants, the financial secretary to the treasury, Mark Hoban MP and the BSA, the group has published its final report.
The BSA welcomed recommendations that the government should adopt a comprehensive policy strategy to implement its coalition agreement commitment to promote mutuals.
Other recommendations in the report included a proposal that legislation establishing the new regulatory authorities must include “promoting mutuals and fostering diversity” within the statutory objectives.
The report also suggested the government should fully consider remutualising Northern Rock and publish advice that it has received in relation to this matter.
