Would you bank with your supermarket?

11 February 2014
More than half of people are considering banking or taking out insurance with their supermarket over the next 12 months because of competitive pricing and loyalty rewards, according to research.
Some 55% of people are considering using a supermarket for a financial service, according to research from Sainsburys, causing think-tank Consumer Intelligence to ask: are the supermarkets a threat to banks? 
"Many supermarkets are now routinely offering a range of banking and insurance products and they are clearly here to stay as part of the financial landscape," says Consumer Intelligence.  
It points out that the giant companies have unrivalled access to potential customers through both in-store and online contact. 
Sainbury's says it currently has 23 million shoppers visiting its store every week, which could easily help bolster the Sainsbury's Bank's customer base from its current 1.5 million. 

Product range

Consumer Intelligence analysed the financial offerings from Asda Money, M&S Bank, Sainbury's Bank and Tesco Bank, and found that mortgages are the only product currently not offered by any of the former three.
Tesco Bank does offer a range of mortgages, with a two year fixed rate as little as 1.64% of those with a 40% deposit and trackers as low as base rate plus 1.25%. However, the provider does not accept small deposits - the minimum accepted is 15%. 
Current accounts are offered by M&S and Tesco will be launching one later this year, and all but Asda offer savings accounts and unsecured loans. 
A range of insurance products covering everything from travel to pets is available from all the providers, as are travel money and credit cards, and Consumer Intelligence points out that the supermarkets "are no strangers to the best buy tables" with the rates they offer.
Tesco currently offers one of the best credit card deals available, with 0% APR for the first 18 months, while Sainsbury's and Marks & Spencer offer some of the best rates for loans. 
Research from Sainsbury's found that of those considering a supermarket financial product, 69% liked the competitive pricing and 47% favoured the loyalty rewards available.

This article was written for our sister website Money Observer

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