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Trust in supermarket banks on the rise

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Consumer confidence in supermarket banks has increased substantially over the past five years, research from MoneySuperMarket has found.

While still fairly low at 13 per cent, the proportion of consumers who said they would trust a supermarket brand like Tesco, Sainsbury’s and M&S more than a high street bank has increased by nine percentage points over the last five years.

In 2009, just four per cent said they would trust these recent entrants to the financial services market more than established players.

The percentage of consumers who trust supermarket and high street banks equally has increased from 22 per cent in 2009 to 40 per cent in 2014.

Despite these gains, 34 per cent of people still said they would trust a high street bank more than their supermarket counterparts.

Kevin Mountford, head of banking at MoneySuperMarket, said: “Many people are naturally cautious about the diversification of these brands and the feeling could be that the expertise and capability might not be delivered by a less traditional provider, especially as they take on so many different industries simultaneously.

“However, our research has shown people’s confidence in supermarket banks is growing. People should not be swayed by sticking with what they know, as the less traditional banks might come without the legacy of issues some banking stalwarts carry.”

A third of consumers are happy to see supermarket and retail branks expand into the financial sector.

Tesco’s first current account launched last week to much fanfare, and in May fellow retailer M&S’s credit card topped the ‘most trusted’ category in the Which? credit card customer satisfaction poll.

Consumers also said supermarket banks are on an even keel with their high street rivals when it comes to customer service. Almost half of people felt a supermarket bank would provide an equal level of customer service as a high street bank, up from 28 per cent in 2009.

According to MoneySuperMarket, people are most willing to take out or have already taken out a credit card from one these banks, followed by a savings account and a current account.

Just eight per cent were willing to get a mortgage through a supermarket or retailer, indicating a reluctance to rely on these organisations for major financial needs.

Mountford continued: “The introduction of more competition within financial services should be embraced, especially as this generally heralds a better deal for consumers. The more choice there is, the easier people should find the right fit for their modern day banking needs.”

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