In the future your bank might also sell you toilet paper and diet Coke

Adam Smith, who works out of our London office, has a story up on Time.com today about the problems caused by folks no longer trusting banks. He throws some numbers at us:

According to the Chicago Booth/Kellogg School Financial Trust Index, a new quarterly measure of Americans' confidence in financial institutions, faith in banks — on a scale of 1 to 5, where 1 denotes no trust and 5 complete confidence — fell from 2.95 to 2.8 in the first quarter of this year; trust in bankers slipped from 2.6 to 2.5. Things are even bleaker elsewhere. In a January ICM poll carried out across 17 of the world's leading economies — using a scale of 1 to 10 — public trust in the stability and solidity of banks came in at 4 in Germany, 4.2 in the U.K., and 5.1 in France.

Harvard Business School professor John Quelch gets at that dynamic in this post, which is mostly about how banks should be advertising right now, but  then takes this interesting turn at the end:

The turmoil and distrust in the financial services sector is an open invitation to other non-financial companies to exploit the brand vacuum created by the demise of the likes of Merrill Lynch and RBS. Look to Tesco, the leading retailer in the United Kingdom, to extend further its reach into financial services. Look to trusted brands like Wal Mart and even Google in the United States to do the same. After all, the financial services industry is crying out for a brand that promises to "do no evil."

According to this London Times article, the supermarket chain Tesco has signed up more than a million customers for savings and credit-card accounts during the past year—due, at least in part, to people being turned off by banks. The company plans to add 30 in-store branches by the end of the year. Tesco CEO Terry Leahy recently said that his company aims to be "people's bank," and that "we have had a complete pick of people from the financial services sector. If you were starting up in ordinary times they would have been either really expensive to attract or not possible to get." Boots, another British retailer, is thinking about heading down a similar road.

In this part of the world, the 800-pound gorilla is, of course, Wal-Mart. The retailer has had a bank in Mexico for a couple of years now, but hasn't been able to win regulatory approval to do the same in the U.S. But you don't have to be a bank to offer financial services, and Wal-Mart has been ramping up on offerings like check cashing for the past few years. A recent report from the Aite Group shows that Wal-Mart already has an 11% share of that market. You can also get money orders, request credit reports, even open an IRA at Wal-Mart. Is mortgage lending far behind?

Barbara!