This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
3/23/2006
Wal-Bank?
We have all heard that Wal-Mart is planning to enter the financial services industry. I work in financial services and many people are concerned that Wal-Mart could bring their many retailing strengths to this market and force many companies out of business. I read an article that discusses reasons why Wal-Mart may not succeed in this market. Some of the reasons the author believes Wal-Mart may not succeed in this market is because there are countless regulations in this market that Wal-Mart doesn’t have to worry about currently. Second, people’s perceptions of Wal-Mart and their perceptions of what a depository institution should be are very different. As a member of the financial services industry it is good to hear that Wal-Mart may encounter difficulties in this endeavor.
Subscribe to:
Post Comments (Atom)
3 comments:
Wal-Mart has applied in Utah to become an Industrial Loan Charter (ILC). I have noticed that since Wal-Mart’s application for ILC status in Utah, the FDIC has scrutinized ILC’s in Utah much more closely. That is fine, because ILC’s are chartered for specific and limited purposes. That means that Wal-Mart might become a bank, but it isn’t going to offer mortgages, car loans, checking accounts, and SBA loans. It is going to be very narrow in scope. So, big deal if Wal-Mart breaks into the banking world. Remember that bankers rule the banking world, and they aren’t going to let Wal-Mart crush anyone but the credit unions. Just kidding about the credit union thing…
To me, Wal-Mart is first and foremost a discount retailer. However, this is not to say that they can't succeed in the banking business. Look at how they have broken into the grocery business! Food merchandise is very different from other types of products, yet they have found a way to include it in their extensive distribution networks, and managed to make a profit. Although I don't know if I would bank through Wal-Mart, I'm sure there are thousands of Americans who would. They truly are becoming a one-stop shop for all of their customers' needs.
Most of the post and comments were opinion, so I don't have much to say.
Post a Comment