Financial Supermarket

Definition of 'Financial Supermarket'


An institution or company that offers a wide range of financial services under one roof. Financial supermarkets provide services which typically include banking, stock brokerage and insurance, and occasionally real-estate brokerage. The basic rationale behind the financial supermarket concept is to generate more fees per client and foster customer loyalty.

Investopedia explains 'Financial Supermarket'


While financial supermarkets may certainly offer convenience and efficiency to customers, they have not become dominant players in the financial services industry for a number of reasons. This is best exemplified by the retreat of Citibank since 2009 from its avowed objective of becoming a global financial supermarket.

Firstly, increasing government regulation in the wake of the 2008 global credit crunch may hamper merger attempts in the financial industry. Secondly, in challenging economic times, price-conscious customers are likely to shop around for the best deal - whether it is the lowest interest rate on a mortgage or the least amount of commissions charged for stock transactions - rather than pay a premium price for the sake of convenience. Finally, the establishment of the Internet as a medium of disintermediation for financial services is a potent threat to the consolidation activity that is required to form a financial supermarket.



comments powered by Disqus
Hot Definitions
  1. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. So when examining a specific market, if all other markets are in equilibrium, Walras' Law asserts that the examined market is also in equilibrium.
  2. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
  3. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
  5. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious debt when government leaders use borrowed funds in ways that don't benefit or even oppress citizens. Some legal scholars argue that successor governments should not be held accountable for odious debt incurred by earlier regimes, but there is no consensus on how odious debt should actually be treated.
  6. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
Trading Center