BLOG: Are supermarket brands better placed to occupy the financial services sector than banking brands?

There’s no doubt that consumer trust in the banking sector is at an all time low, so it’s no surprise that some of our most valued retailers are taking a punt at providing financial services.

Take Tesco for example. It’s planning to launch 30 bank branches within existing supermarkets before the end of 2009 offering the likes of savings accounts, insurance policies and credit cards to their customers. The higher trust levels consumers have in supermarkets over banks is largely a result of the way supermarkets use the data they acquire about customers, and use it to build personal relationships with them; in this case the Tesco Clubcard store card scheme.

Let us not forget, banks have this data too, but they are not always choosing to use it in the proactive way that supermarkets are. The swiftness with which supermarkets are acting; launching value offers in the face of rising food prices, is creating the impression that they are helping in times of financial need.

Consumers are looking for safety and a brand they know. Banks should be monitoring supermarkets every move, looking at the initiatives they use to build trust. They need to expand their own use of purchasing behaviour data to create more personalised and relevant offers to customers.

Banks need to emulate the personalised approach of the supermarkets. Let’s wait and see which supermarket is next to follow suit and announce their own personal finance services- this could be a seismic change in the financial services market.

by Neville Upton, Apr 24 2009, 02:40 PM