Supermarkets strive to be one-stop-shops, and with a few big names entering the financial services sector, they’re edging closer to their goal. As Asda launches its own financial range, will you be tempted to switch?
Thanks to a potent mix of technical problems and the Libor scandal, the reputation of big banks has taken a battering. In the meantime, some supermarkets have swept in to try and take the term ‘convenience store’ to a new level by tempting customers away from more traditional financial institutions.
Most recently, Asda has launched a range of financial services and products including car, travel and home insurance, currency exchange and a flagship cashback credit card.
Asda is hot on the tail of Marks & Spencer, which recently announced it is to open 50 bank branches in its stores across the UK. Of course, Tesco and Sainsbury’s have already been operating in the financial sector for a long time.
Supermarkets sweep in
There’s definitely an appeal to being able to fiddle with my finances at the same time I do my weekly shop, for convenience if nothing else. But the reality is that it just won’t happen – I tend to do most of my banking online now, as I’m sure many of you do too.
So it seems to me that it’s the supermarket brands we’re buying into. I’m pretty sure I’m not alone in having a more favourable view of supermarkets than the big banks right now – not that that’s hard. But if you scratch the surface, you’ll find that behind supermarket financial products is another bank or provider.
For example, M&S Money’s new banking services are half-owned by HSBC. Sainsbury’s products are powered by Lloyd’s, Tesco’s by RBS, while Asda’s offerings come via a wide-range of providers. This means that switching from your current bank won’t give you the clean break away from the big banks you might’ve hoped for.
That shouldn’t necessarily put you off though, as M&S is a Which? Recommended Provider for car and home insurance, and both M&S and Tesco are recommended for credit cards.
A new wave of competition
I think that any competition in the much-derided banking sector, whether in supermarkets or otherwise, has to be a good thing. More choice should mean access to better deals and better customer service for all of us.
Our chief executive Peter Vicary-Smith this week for the banking sector to be referred to the Competition Commission to ‘break the dominance of the big banks’ and ‘turn this sector into a profession we can all trust again’, and moves like this from supermarket brands can only help towards making that happen.
Are you tempted to switch from a bank to a supermarket like Asda? Do you think supermarkets can do a better job than the banks?