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.