Here's an interesting one...Sainsbury's is closing in on full ownership of Sainsbury's Bank. The
supermarket giant confirmed this morning that it will take control of
the bank by buying the 50 per cent held by partner Lloyds Banking Group (LBG)
in a £248 million deal.Sainsbury's was the first major British supermarket to open a bank, launching in 1997 in a 50/50 joint venture with Bank of Scotland, later subsumed by Lloyds. It says that this latest move gives it the opportunity to increase its number of customers and enhance loyalty by offering accessible, high quality and tailored products which reward customers who bank and shop with it...But will it become a major player? Probably not. It currently has just over one million customers and has been making a decent profit for Sainsbury's and LBG. But that's unlikely to worry retail banking's 'big five' (Lloyds, RBS, Barclays, HSBC and Santander UK) who still (rather depressingly) control the majority of UK current accounts. The government is keen to encourage greater competition but customers remain reluctant to switch.
Technology wise, over a 42 month period the bank will transition support and back office services away from Lloyds Banking Group. Call centre services will be provided in-house by the bank and banking platforms will be delivered by FIS. All parties have been working together for a number of months to agree a detailed transition plan.
According to a statement issued by Sainsbury's: "The transition will involve the transfer of data from legacy Lloyds Banking Group systems to the latest generation banking platform. This platform will allow a greater degree of flexibility, enabling new product launches and facilitating a much improved digital offer to customers."
Certainly, all involved will be hoping to tread a different path to that of Tesco Bank, which experienced various problems resulting in a raft of negative headlines when it broke with RBS and set up its own core banking system. Ugh. Who'd be a retail banker, eh?
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