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Could supermarkets give high street banks a run for their money?

What about picking up pet insurance or opening a savings account while buying your milk and bread? Some supermarkets offer financial products, but could they give high street banks a run for their money?

Millions of people have bought some sort of financial product from a supermarket. So are these stores genuine challengers to the high street banks as has been long predicted or will they always play second fiddle?

It's time for your weekly big shop; something for dinner, don't forget the essentials and how about a savings account? At Tesco, the UK's largest supermarket chain, the banking arm has just opened its 7 millionth customer account. Still tiny compared with the big banks, but is supermarket banking finally making an attempt to go mainstream?

David Black, Banking Specialist from Consumer Intelligence believes: "It's another area of operation for them and it's an obvious one to expand into because they know so much about their customers and they have so many customers. There's also the issue that the banks have a slightly bad reputation amongst many, so they can capitalise on that, use their marketing muscle to showcase their products in the banking and the insurance world and pick up quite a few customers. They will become a real worry to the banks."

They do operate in different ways. Asda Money offers a basket of financial products from various providers and M&S Bank is wholly owned by HSBC. But Tesco, once in bed with RBS, has gone it alone since 2008 and Sainsbury's has just made the same move by cutting links with Lloyds.

Bank switching is now quicker and easier, but most supermarkets have yet to enter big time banking by offering current accounts. If and when they do, will we be comfortable putting our standing orders and our sausages in the same basket?

High street banks say they welcome competition, but with challenger banks having to jump lots of hurdles just to get started, do they have much to fear?

James Daley, Personal finance expert feels: "Supermarket banks have always been really competitive when it comes to the simple products like personal loans, credit cards, savings accounts. Over the last couple of years we've seen a few of them start talking about getting into the current account market and that's going to be much more challenging for them. The challenge that all of these new providers will have - including the supermarkets - is getting people to switch. People are still reluctant and so these challengers are going to have to come up with something really special and some great incentives for people to switch."

So to really get a foothold in the financial services sector these grocery giants need to offer bargains for banking too.