New Banks Friday, 20th March 2009

Could supermarkets pose a greater threat to the traditional financial services companies in the next decade than anything else.

This might be the result if a survey was conducted among financial services providers including high street banks and building societies, specialist investment providers and insurers.If senior individuals in the organisations were asked to rank different sectors in terms of threat in the next decade supermarkets might come out on top.

Supermarkets have been able to enter and achieve significant market growth for several reasons, including the fact that consumers have confidence in their brands and their almost fully outsourced operations mean costs are kept to the minimum.

In addtition supermarkets also have a diverse product range spanning many financial sectors, as well as the ability to source products from a broad range of providers, without any perceived fears of conflict of interest which often inhibit some financial companies.

The dynamics for distributing the standard financial products, that most people require, to meet basic protection, savings and investments, pension and insurance needs, have changed. Whilst people don't necessarily want a one stop shop, they also don't want to trawl around different providers. The more enlightened companies have used the same tactics as supermarkets to increase their product ranges.