FIS picks up four-year outsourcing deal at Sainsbury’s
Bank has named FIS as its technology partner to provide a technology platform in a fully-hosted outsourcing deal that will run for the next four years.
The news comes on the back of the supermarket giant announcing that it intends to buy out the 50% stake Lloyds Banking Group holds in Sainsbury’s Bank for £248 million and expand its offerings, targeting existing retail customers and “leveraging Nectar [loyalty card] data to drive sales uplifts in both financial services and the core supermarket business”.
Currently, some 5% of Sainsbury’s customers also have a financial product with the bank and it sees “significant opportunity to increase this number having taken full ownership”. After taking out a bank product, Sainsbury’s shoppers become more loyal, spending more in-store, it reports.
Over a 42 month period, Sainsbury’s Bank will migrate 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.
The transition will involve the transfer of data from legacy Lloyds Banking Group systems to a range of FIS platforms, intended to “allow a greater degree of flexibility, enabling new product launches and facilitating a much improved digital offer to customers”.
FIS will be providing its Profile core banking platform, B2K credit card processor, Fraud Navigator and TouchPoint suite of customer and channel management products. All will be operated on a fully hosted basis using FIS UK facilities. The integrated solutions will support the bank’s deposit, savings, loan and credit cards accounts, and deliver seamless channel integration to enable customers to access their accounts through telephone, internet and mobile devices.
Mark Davey, EVP, International, FIS, said; “we have spent the past year scoping it out, working jointly under non-disclosure”. Although
there is a 42-month transition window, there are a number of milestones that have been set, and the first deliverables will be “much sooner”
FIS specialises in hosted core banking solutions, and claims relationships with 40 of the world’s top 50 banks.
“In the US, the standard model is outsourcing,” said Davey. “Banks there don’t compete on undifferentiated services. In Europe, and particularly the UK, since the 1960s banks have been building their own systems – serving a market of one. We’ve been preaching that for every bank to have its own infrastructure is pointless.”
Davey declined to comment on the value of the contract.
Peter Griffiths, chief executive of Sainsbury’s Bank said “Introducing our new technology partner is a major step forward in our evolution as we become a wholly owned bank. We are delighted to be working with FIS. We are very pleased with their domain expertise and the extensive functionality delivered by their banking and payments solutions.”
Griffiths joined Sainsbury’s Bank at the end of last year after a 10-year stint as chief executive of the Principality Building Society. He was also chairman of the Building Societies Association from 2011-12, in which role he was an advocate of the mutual structure most societies operate under.