Supermarket giant Coles is expanding its financial offerings, leading to speculation it will soon become bigger competition against banks.

The company already offers a wide range of financial products, including credit cards, car insurance, life insurance, home insurance and now personal loans. According to the Coles Financial Services website, its aim is bring “everyday financial products such as insurance and credit cards to Australian families.”

“At Coles, we’ve been delivering quality products and service for almost 100 years, and Coles Financial Services is backed by some of the biggest financial service providers in Australia.”

The latest offering in development – personal loans – is backed by GE Capital, which also underwrites the Coles Rewards MasterCard and Coles No Annual Fee MasterCard. The new loan options are expected to be released in 2015 and follow the announcement of a joint venture with GE.

“We’ve had a relationship with GE since the mid-90s but that’s been a traditional partnership, white-label agreement where GE was always the issuer behind the cards whereas today we are forming a new business jointly with them,” Coles general manager of financial services, Richard Wormald, has told press.

“We are focusing on credit cards and personal lending products initially but we will continue to look at a range of other sectors and broaden our range of products.”

The news has led to speculation that Coles could soon become a one-stop-shop for everything from groceries to insurance, loans and everyday banking.

“Supermarket giant Coles is taking on the big four banks by offering customers the ability to pick up loans and other personal finance products at the same time as their groceries,” a media report from Yahoo says, with similar sentiments expressed by other News Limited and Fairfax Media publications.

To date, Coles has issued around 350,000 insurance policies and has over 400,000 credit card customers, with competitive features and the potential for more flybuys rewards points acting as huge drawcards for consumers.

It is now also the first retailer in Australia to offer a mobile wallet to its credit card customers. The Coles Mobile Wallet was launched in July 2014 and lets customers pay with their phone at the checkout and makes it easier to keep track of purchases and flybuys rewards.

From Credit to Debit

Coles executives, including Wormald, have compared its financial ventures to those of retailers in the UK, such as Tesco.

The UK supermarket giant made its first forays into finance in the 90s and now has a wide range of financial products that make it serious competition to traditional UK banks and credit unions.

Like Coles, Tesco Bank offers a range of insurance options, credit cards and mobile banking, but it also has well established loans (including mortgages), five savings accounts options and one everyday banking account that includes a debit card.

The latter – called the Tesco Current Account – earns one Tesco reward point for every £8 (about AUD$14) spent outside of Tesco businesses, and one point per £4 spent in the store on top of standard rewards.

There are online and mobile banking options, contactless debit cards, cash machines and free text and email alerts specific to the account.

Like many standard debit card options in Australia, this UK supermarket debit card has a monthly fee (£5 or AUD$9) that’s waived when customers deposit £750 (AUD$1352) each month.

So are debit cards similar to this one the next step for Coles’ financial products?

While both Coles and GE Capital remain tight-lipped about what their venture will include, the sentiments expressed so far suggest everyday banking is something Coles will explore in the future – especially since Wormald and others have directly compared Coles ventures to those of Tesco.

That could mean Coles will offer bank accounts or prepaid debit cards that earn you more flybuys rewards for your spending, or even savings accounts that offer bigger benefits the more you save.

The introduction of these banking options would also have an impact on banking in general. While the Big Banks and smaller financial institutions currently compete with one another, the more companies like Coles expand their financial offerings, the more these banks have to factor it into their own options.

If, for example, Coles offered a fee free rewards debit card, other banks could consider doing the same. In fact, Bankwest has already headed in that direction with its Qantas Transaction debit card account.

As more and more companies step into the banking world, competition in banking is definitely heating up. So, when it comes to debit cards, it is only a matter of time before we have more options that offer financial savings, rewards and other features.