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TLDR:
- Supermarkets are expanding into financial services market with the help of fintech collaborations.
- Tesco and Sainsbury’s are examples of supermarkets venturing into banking.
The evolving relationship between supermarkets and banking is highlighted in this analysis, focusing on the key role of fintechs in driving this transformation. Tesco’s entry to the financial services market through its Clubcard programme in 1995 and subsequent launch of Tesco Bank in 1997 showcases the trend of supermarkets becoming one-stop-shops for financial needs. Tesco’s partnerships with fintechs like Mastercard and Onfido have further enhanced its banking offerings. Similarly, Sainsbury’s Bank, a competitor to Tesco Bank, has also utilized fintech collaborations for its banking services.
Despite their initial success, both Tesco Bank and Sainsbury’s Bank have recently made strategic decisions regarding their banking units. While Tesco Bank sold its retail banking unit to Barclays, Sainsbury’s Bank announced a phased withdrawal of its main banking business. Other examples from around the globe, such as Coles in Australia and Walmart in the US, demonstrate how supermarkets are leveraging fintech partnerships to offer financial products and services to their customers.
The partnerships between supermarkets and fintechs suggest a shift in the traditional roles of these entities, with supermarkets increasingly viewing financial services as a valuable addition to their portfolios. These collaborations have the potential to reach untapped audiences and offer innovative solutions beyond traditional banking. The evolving landscape of supermarkets and banking underscores the importance of collaboration and co-operation in the fintech industry.
