Tesco’s move into banking has, some analysts believe, failed to set the
world on fire. Compared to the numbers who signed up for Clubcard, the
few hundred thousand who have signed up for Clubcard Plus might seem a
Yet for most financial institutions, opening that many accounts over
that short a time would be deemed a triumph - especially for a company
with no track record as a financial services retailer.
Tesco will no doubt take time to establish itself in an entirely new
market, but we believe the advantages it enjoys over conventional
clearing banks make it worth the effort for Tesco, for its partner
NatWest, and for its customers.
The big banks - and even the former mutuals who now aim to compete with
them - are still tied to a network of branches which are in all the
wrong places. Where 20 years ago family shopping was done on the high
street, now it’s done at the out-of-town superstore. It’s no longer
convenient to drop into a branch, except during office lunch hours when
many are too crowded to use.
True, the banks have reacted by placing cash machines everywhere, from
tube stations to motorway service areas, but a hole in the wall is not
yet a substitute for a branch, either for the user or for the bank which
wants a retail outlet to sell other financial services.
Tesco has the ability to dispense money at its tills and to carry
information about financial services at any number of locations. It
isn’t too great a leap to see paying-in facilities or foreign exchange
added to the mix to duplicate the most-used facilities of the high
street at the point where they’re needed today.
For banks, the future belongs to telephone and computer banking, and to
partnerships with retailers with the right sites, like Tesco. But only
those prepared to break the reliance on those millstone branch networks