Are supermarkets the new banks?

You can pick up travel insurance as well as your suncream and sunnies at the supermarket now - are we set for a high street banking revolution?

From electrical goods to clothes, books and music, supermarkets sell far more than just groceries these days.

Loans, credit cards, savings accounts, ISAs and insurance are all available – and the rates and terms are competitive too.

Take Tesco's fixed-rate bonds or Sainsbury's short-term loans frequently making the best buy tables.

The Co-operative's bank account offers some of the lowest overdraft rates, while Asda's travel insurance includes unlimited medical expenses as standard.

And there's more:

Tesco will start offering mortgages later this year and current accounts in 2012.

The co-operative meanwhile is running an 18-month trial of in-store bank branches.

The Monewise customer service awards revealed that trust in the bigger banks is at a low, while supermarkets emerged as some of the most trusted brands.

Supermarkets also argue their position as retailers will help them know better their customers' needs and likes.

Incentives like extra loyalty points for buying financial products are an added bonus too.

And if you buy a financial product from a supermarket you get the same protection as if you bought it from your bank.

It's clear high street banks no longer have a monopoly on our finances but whether you choose financial products from your supermarket or a high street bank the same rule applies:

Don't go to the same provider for everything out of convenience. You will either end up with products that don't suit you or ones that don't always offer the best rates.

Lets hope the emergence of supermarkets helps spur on more competitive deals and better customer service all round.

Your Comments

I assume this video was recorded before the "security switchover" debarcle of late June. Like many others I was locked out of my "instant access" account for 5 weeks. The new security online log in had clearly not been thought through properly, nor had "what if" systems been adequately considered. Initial information and communications were dreadful, followed by official reassurance that everything was under control, when it clearly was not. Emailed and telephoned requests for a call back to get a temporary PIN completely failed. When you got through on the phone the staff were unable to issue a temporary PIN themselves and had to request a further call back! They were clearly getting a large number of very angry calls. Time passed.............. Having got through eventually to someone who could release a temporary PIN, the system for printing these out failed and it took 2 weeks to provide the PIN. The complaints team responded to my complaint with an apology and statement of what John Cleese used to call the "bleedin obvious," with no insight as to why every system appeared to fail some of us.
Supermarkets have a great deal to learn about banking and this customer, who previously left Sainsbury Savings when the interest rate became uncompetitive, is now certainly leaving Tesco.