News of the Coles demerger from its conglomerate parent Wesfarmers and its relisting on the ASX has inspired the former chief executive of Tesco Bank to suggest the time has never been better for a major supermarket to set up a banking arm.Benny Higgins, former chief executive of retail banking at Royal Bank of Scotland, HBOS and then at Tesco Bank - the banking arm of the UK supermarket giant -shared his views with Banking Day on the on-again off-again speculation as to whether Woolworths or Coles could ever become an Australian version of the largely successful operation he built up from a joint venture with RBS.Watching the litany of major banks' mea culpas at the royal commission into banking and financial services misconduct with dismay, Higgins suggested that their leaders are either in a state of denial or self-delusion."This does not recognise that what lies at the heart of the problem is a cultural issue and culture is determined by those at the top," he said.Higgins was responsible for setting up Tesco Personal Finance, later renamed Tesco Bank.  He said that starting off as a 50:50 joint venture with RBS did not necessarily make it easier to become a bank but was "a path into becoming a bank that made sense in that it allowed Tesco to get used to what it was like to be having a financial services arm".It may not have made it easier but was a legitimate way to proceed from retail operations into banking. Once the whole venture had been bought by Tesco, and Higgins hired to see it through, the real work began - the expectation that this newcomer would increase competition in a market dominated by a few major players."We then had to build a bank. We had the brand. We had customers. We had products, but we didn't have any infrastructure and just 150 people," Higgins said.He suggested legitimate questions that Woolworths or Coles need to ask themselves if they want to become a local Tesco-style Bank include: "what is it about them that would make choosing to go into financial services a successful venture?" And a second question that is the other side of the same coin: "What is it about being a retail business that will make going into banking successful?"Higgins said the strength of a major retailer is that they already know a lot about their customers. "If they can deploy that knowledge alongside a strong brand and culture, that is going to serve customers, they have every chance of succeeding in the existing [banking] landscape which is struggling," Higgins said."There is a real opportunity. Both Coles and Woolworths have already got brand recognition."On the negative side of the coin is that financial services is a scale business, a point that even Tesco had trouble building up to. "Where supermarkets would find becoming a bank, adding a bank, potentially challenging is that they fully understand what they're moving into," he said."The regulatory and IT requirements come at a