In the old days, prior to the 2007 crash, the banking sector was widely derided as boring, as stuck in the mud.
Critics used to call it 3-6-3 banking.
The bankers paid 3% on deposits, charged 6% on loans, and hit the golf course at 3pm every afternoon.
Encouraged by shareholders and governments to be a bit more adventurous, trouble ensued. Boring banking suddenly looked not so bad after all.
When the supermarkets decided to get into financial services it was widely assumed they would eat the High Street giants for lunch.
With their superior customer service and cut throat competition, Barclays et al would be crushed by the marketing savvy of the food kings.
Stop of at Tesco for a pound of apples – walk out with a mortgage and a life insurance policy.
The grocers quickly discovered that it wasn’t as easy as all that. That customers are more likely to get divorced than flip bank accounts and that what people really wanted from their grocers was, well, groceries.
Today Sainsbury said it is looking to offload its banking arm; arch rival Tesco is rumoured to be doing the same.
Both are, literally and figuratively, going back to their bread and butter.
“Food first” is the strategy Sainsbury first unveiled in 2020 under CEO Simon Roberts. And last, he might as well add.
The whole history of innovation in banking has been a disappointment. They invented the ATM – that was good. Since then, well, mostly the same old names have competed – if you can call it that – on the same old grounds.
Whizzy new tech banks have made barely a dint in the market share of the big players.
Maybe that’s a real shame. Or maybe doing banking well – which just means not screwing it up – is harder than it looks.
