Consumers wary of supermarket banks

by Gill Montia

Story link: Consumers wary of supermarket banks

Government plans to break up Royal Bank of Scotland and Lloyds Banking Group and create three new High Street banking chains have yet to stand the test of public opinion.

Chancellor of the Exchequer Alistair Darling has made it clear that the owners of the new banks must be relative newcomers to UK financial services sector and Tesco is tipped as a potential bidder.

However, recent research from Moneysupermaket.com indicates that large numbers of Britons are happier dealing with established names in banking and wary of major retail brands moving fully into the UK banking sector.

Forty-one per cent of those interviewed thought that large supermarkets were growing too big and only 4% said they would trust a supermarket brand more than a bank to look after their finances.

While 24% were happy to take out a credit card with a supermarket brand, only 5% would take out a mortgage and a mere 10% believed a supermarket would provide better service than a bank.

Eleven per cent felt that “supermarket brands are taking over our lives and should stick to more traditional products”.

A further 30% felt supermarket “have already gone too far and should stop expanding”.

Moneysupermarket’s head of banking Kevin Mountford, comments: “Many people are naturally cynical about the expansion of large brands into new product areas, feeling that certain companies are getting a bit too big for their boots in taking on so many different industries all at once.”

He adds: “The trend of supermarket brands entering into the banking sector is not likely to slow down soon, however it is quite clear they haven’t yet won over the British public, and until they do, they will be consigned to a relatively small market share.”

The research was carried out by Opinium on behalf of Moneysupermarket.com and involved an online poll of 2012 adults.