The launch of Sainsbury’s Bank
A Sainsbury's Bank case study

Page 1: Introduction

Banking is currently undergoing significant structural change. Large building societies have demutualised. Newcomers, such as supermarkets, are entering the banking market with a growing range of financial products. At the same time, banks are increasingly recognising the attractions of developing new delivery channels and re-engineering traditional channels in order to meet changing customer...
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Page 2: The launch

On 25th October 1996, J. Sainsbury plc and Bank of Scotland announced they were to launch a joint venture bank in February 1997. The Bank would be 55% owned by J. Sainsbury plc and 45% owned by Bank of Scotland. A joint venture is a partnership which allows businesses to keep their independence at the same time as sharing their expertise. A joint venture means that two organisations work...
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Page 3: A fresh approach

On 19th February 1997, Sainsbury’s Bank opened for business. It offered two Visa credit cards (Classic and Gold) and two savings accounts (Instant Access and Christmas Saver). The Bank initially offered a 24-hour telephone banking service and trialled Bank Information Points, which include marketing literature as well as a Freephone to the Bank’s call centre. Sainsbury’s Bank...
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Page 4: Results of the venture

So how successful has Sainsbury’s Bank been? Sainsbury’s Bank now has over 800,000 customer accounts and continues to add 10,000 new accounts each week. The Bank has in excess of £1.6 billion of customer deposits and £400 million of commitments to customers. The results from Sainsbury’s Bank compare very favourably with those of its main rival Tesco (which set up...
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Page 5: Customer benefits

This case study has already indicated the synergistic benefits to Bank of Scotland and J. Sainsbury plc of their joint venture. An important part of the synergy which should not be overlooked, however, is the benefits to the consumer. Most people do the bulk of their weekly shopping at their favourite supermarket so it makes sense that customers would also consider using the financial products...
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Page 6: Conclusion

Initiatives like supermarket banking are creating a highly competitive market framework in the banking sector, with a clear focus on consumers and their ever-changing needs. Much of this change has been made possible by developments in sophisticated information technologies, which means customers can carry out their everyday banking through a wide range of channels. At the end of the day, it is...
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