Comparison websites, internet-based supermarkets that collate and compare the prices of a range of products from mortgages to credit cards, are changing the face of the financial markets.

The upheaval in the financial world is part of a wider trend that has also revolutionised the travel and holiday markets and even made choosing an electricity or gas supplier a less random process.

Before now, customers would have had access to a limited range of choices through a face-to-face meeting or a telephone call with their broker, or face the prospect of clicking on a bewildering range of company websites. Now dozens of comparison websites – also known as aggregators – display hundreds of options for the would-be home owner, saver or traveller all in one place.

“The internet is a comparison dream,” says Richard Mason, managing director of insurance channels at Moneysupermarket.com, one of the sites. “We have brought cheaper loans, better savings rates and made the financial services industry smarten up generally.”

The websites have come from nowhere over the past few years to account for between 10 and 15 per cent of the market and are continuing to grow, says Merlin Stone, professor of marketing at Bristol Business School.

Their emergence as an important new channel for distributing financial products is due to the development of an internet technology known as “screen scraping” that allows a website to take data from other sites. This software was originally designed to manage an individual’s different investments in a single online account. But it failed to catch on for that purpose.

The websites have also benefited from customer suspicion of the conventional advice channels for financial services products. A series of misselling scandals – from split capital investment trusts to endowment mortgages – has damaged the credibility of product providers and advisers alike.

A survey published earlier this month by Which?, the consumer group, showed that fewer than one-third of advisers were providing their customers with all the information needed to take a sensible purchasing decision. The websites provide information rather than advice but many of them are nevertheless registered with the FSA.

For the simpler financial products, the amount of information that can be gleaned from a comparison website, and from clicking through to the underlying company website, is adequate for most customers to decide what it is they need.

A sign of the market’s maturity has been a slew of takeover deals in recent months with the sale of USwitch.com to EW Scripps, a US media group, and of Simplyswitch.co.uk to the Daily Mail & General Trust. SMG, formerly Scottish Media Group, launched its Peopleschampion.com website earlier this month, using data supplied by Moneysupermarket.com. Media groups are attracted to the comparison websites because they provide a way of replacing advertising revenues that the sites are eating into.

Alongside these deals, Moneysupermarket.com is considering a stock market flotation that bankers estimate could value the company at £700m-£1bn.

The websites are free to the customer but make their money from charging the companies whose products they feature a fee either for every click-through to the company website or increasingly only for successful click-throughs that lead to the customer buying the product. Some relate the fee charged to the value of the product bought.

Jim Spowart, the man behind the launch of Peopleschampion.com – and previously the founder of Intelligent Finance, the internet banking arm of HBOS – says he may also offer products such as mobile phones and broadband services, as well as financial services products such as credit cards, on the website. But this creates a potential conflict of interest: sites may have an incentive to list their own products more favourably in the comparison tables. However, Spowart insists that own products will not be given any special treatment.

Other data providers also appear relaxed about the idea of websites mixing independent ratings with product sales, pointing to mortgage brokers who obtain special deals from lenders that allow them to offer their own branded mortgages at competitive rates.

Another issue for the users of these websites is the comprehensiveness (or otherwise) of the data that they provide. The websites strike deals with many of the product providers to obtain access to their information and to establish direct links between the comparison website and the provider’s.

But there may be many providers out there who do not agree a deal with a particular website. What happens then?

“In every channel there are providers who we don’t have a relationship with,” says Moneysupermarket.com’s Richard Mason. “We make clear by displaying the logo and showing an ‘Apply’ button if we have a relationship. But we want everyone in there. If, say, we recommend a credit card, a customer will expect his present card to be in there so he can compare, even if we have no relationship with that provider.”

Despite their efforts to include all providers, the websites do differ as to who they list – so customers are advised to use more than one site when looking for the best deal.

As the comparison websites become an established part of the financial scene, pressure is growing for them to reduce their emphasis on pricing and for them to take account of a broader range of criteria. At present, some comparision sites can mislead customers, leading them to believe they can secure the best buys listed online. Yet, when they actually apply, they may well be refused because of their poor credit rating, with such a refusal often damaging their credit rating yet further.

Stone suggests that the comparison websites could copy the lead set by eBay, the online auctioneer, where customers rate vendors, and Amazon.com, which lets customers post reviews of vendors and books sold on its website.

Some websites are already moving in this direction. Moneyexpert.com creates a simple credit profile of its customers before they apply for products and includes glossaries, guides and a calculation tool on its site. It is backing a proposal from Stone for websites to abide by a code of conduct requiring transparency on how they generate revenue and to widen the range of advice they give.

The comparison websites are already changing the way many financial products are sold. If they can broaden the range of information they offer without sacrificing their simplicity and convenience, this could just be the beginning.