From a competitive standpoint, banks should think about Wal-Mart as a kind of huge, unstoppable bobo doll. No matter how many times you push it back or put obstacles in its way, sooner or later it will bounce back with another plan. Somehow or other, Wal-Mart obviously has determined, it is going to be in the financial services business. If it isn't going to be allowed to enter banking through the launch an industrial loan corporation (ILC), it will figure out some other way to provide financial services to its existing and potential customers.Hence yesterday's announcement that it will open 1,000 Wal-Mart MoneyCenters -- covering one-fourth of its stores -- by the end of 2008. In an official announcement, the company said: "Wal-Mart MoneyCenters will assist customers who are outside mainstream banking with convenient, nationwide access to low-cost money services, including check cashing, money orders, bill payment and money transfers." The company also noted, "Wal-Mart will continue to pilot and test many different products and services in an effort to provide the financial services customers need at various stages of their lives." As BS&T senior editor Maria Bruno-Britz astutely predicted last week in a column about the Bentonville, Ark.-based retail giant's prepaid card initiative, Wal-Mart has recognized a need/opportunity to provide underbanked and unbanked people with financial services, and is determined to find ways to serve this segment of potential customers. It's a fascinating combination of motives, resources and circumstances. This company has the resources -- and, let's be fair, the ingenuity and determination -- to efficiently and securely support a broad portfolio of financial products and services. So, I'm sure it's only a matter of time before takes the company is also in the insurance and investments business. Convergence certainly has taken a funny path.
Posted by Kathy Burger
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio