Asda has become the latest major retailer to offer in-store financial products, which will enable it to take advantage of the current bad reputation of UK banks, although it will not take deposits or offer counter facilities, an area still exclusive to the banks, but where margins are almost non-existent. Retailers like Asda just focus on added-value services were it makes a retail margin.
Banks also like banking because it enables them to offer a wider range of products to its existing customer base and, where they have a loyalty scheme in place, to deepen the level of information they hold on them, for future marketing.
‘Asda Money’ will promote products such as a credit cards, foreign currency exchange insurance and breakdown cover, which will be sold in stores. Insurance on offer will cover travel, home and car and it’s new credit card can be managed online, over the phone or by post.
The announcement comes shortly after Marks and Spencer revealed their plans to introduce 50 M&S Money branches in-store over the next couple of years. Asda hopes to rival Tesco Bank, but they’re in for a fight as Tesco already boasts 6.5 million customers. John Lewis also launched a credit card, through HSBC and MasterCard, which is managed by John Lewis Financial Services Limited.