Can our supermarkets take on the banks?

halight

http://money.uk.msn.com/banking/current_accounts/article.aspx?cp-documentid=148033985

The mighty Tesco now into banking

glider3560

*Yawns*
Tesco have owned 50% of Tesco Personal Finance since 1997. Since July 2008, Tesco have owned 100% of TPF. Not exactly "news".

dunstonh

And Tesco branded financial products havent exactly been very good. For example, the Tesco stakeholder pension was just a cut down version of the retail Norwich Union (Aviva) stakeholder pension. Tesco were playing on their brand offering a lower quality product.

Biggles

halight wrote: »

Can our supermarkets take on the banks?

You make it sound like they're a knight on a white charger. Sadly, they're only into it for what they can make out of us, just like the banks.

Unfortunately, they'll probably make a fortune from the ignorant and the lazy, the people who will use them because they can bank while they do their 'one-stop shop' without bothering to find out if there's a better deal in the High Street or online.

97trophy

I love Tesco but they can keep their banking. I had their credit card for a while and I found them quite unhelpful. I tried their savings account and the service was even worse.

simon_templar_2

Every little helps though

Extant

No.

Tesco will, in simple terms, just be taking another bank's products and selling them with a Tesco sticker slapped on the front - paying a nice fee to the other bank.

Even if they went REALLY independent, they'd still have to act as an agency bank and rely on the big clearing banks to process transactions for them.

natweststaffmember

They have been hiring a lot of former RBS people as well. They have got quite a good team but as BarclaysManager says, they will need to use a clearing bank, probably RBS since it was formerly partners in the business.

withnell

BarclaysManager wrote: »

Even if they went REALLY independent, they'd still have to act as an agency bank and rely on the big clearing banks to process transactions for them.

Is there any particular restriction on them becoming a clearing bank? I know it's a large investment, but I'm assuming Tescos are planning on a large scale

Extant

There's no way, from a business perspective, that they'd even bother - if they did amazingly well then it might be a reality years down the line, but there's no point just jumping in. They'd have spent literally billions to set up as a clearing bank... with nothing to clear. It'd take them years to recoup their initial investment, if they ever did - everybody is assuming that people would want to bank with Tesco, and that Tesco would offer something fundamentally different to what's available now.

Even if they did and they did start to gather speed, the big four would just counter and retain their existing customer base that way.

jambosans

BarclaysManager wrote: »

everybody is assuming that people would want to bank with Tesco, and that Tesco would offer something fundamentally different to what's available now.

To name but a few:-

A tin of Tesco Value Bake Beans as a welcoming gift.

Clubcard Points instead of credit interest.

"Self Service Banking" that won't accept your sort code and account number, and always sends money back out when your trying to deposit into your Tesco's Finest Current Account.

Ha.