Sainsbury’s Finance, the banking arm of
the UK-headquartered retailer, has deployed Teradata software to
bring all its data onto a single platform and build a virtual
customer-loyalty loop.

The Teradata solution aims to avoid
duplication of data and provide analytical solutions for

“We needed a provider that could bring
all of our data sources together, a company that would be able to
build a solution from scratch and future-proof it,” Sainsbury’s
Finance head of customer insights Simon Axon told RBI.

Sainsbury’s aims to replicate its
strong customer service network from its supermarket parent to its
banking operations, with a single source, 360-degree view of
customers with their Nectar and Sainsbury’s loyalty patterns
integrated with their Sainsbury’s Finance data.

According to Sainsbury’s, “rich data
insight gained by understanding customer loyalty” would help the
lender to tailor its products and service to suit its customer

From being an analytical tool
initially, the Teradata solution has now become an “operational
tool at the heart of our business proposition”, adds Axon

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Eamonn Hughes, financial services
director, Teradata, says the Teradata platform consolidates all the
Sainsbury’s Finance data into one from a combination of sources,
“primarily from the Sainsbury supermarket Nectar loyalty
programme”, merged with the bank data to obtain a “strong view of
the customer”.

In addition to the Teradata solution,
the bank’s data warehouse uses various analytics tools including
software from SAS to enable a fast response to complex

According to Hughes, the Teradata
software platform “saves time and effort to find out answers to
business questions from different data sources” and gives
Sainsbury’s Finance a “reliable and scalable platform”.

Hughes adds that having had more of a
start-up nature, Sainsbury’s Finance was “reasonably quick at
making decisions about what they wanted to do.”

Sainsbury’s Finance has so far received
assistance on its ‘preferential pricing’ and the ‘Double Nectar’
initiatives through Teradata platforms.

The Teradata platform aims to encourage
Sainsbury’s supermarket customers to “purchase and take on finance
products from the system”, says Hughes.

The core target market for Sainsbury’s
Finance is the “loyal Sainsbury’s shopper” and the data from its
Nectar scheme gives the lender insight into when to target
customers and which products are likely to be of interest.

Axon believes the ‘virtual loyalty
loop’ will differentiate Sainsbury’s Finance from high street
banking rivals.

“We offer a range of products that
combine preferential pricing and a Double Nectar point offer for
two years. Our business proposition is to make shopping more
rewarding for our customers and for them to benefit from choosing
us for their banking and shopping needs.”

The Double Nectar point initiative
enables Sainsbury’s Finance customers to earn more points depending
on how many products the customer opts for.

Early results show that Sainsbury’s
Finance’s insurance business is showing 25% year on year growth.
Through the reward scheme, new business in the home insurance
sector has increased by 50% and pet insurance by 30%.

The proposition has also delivered
increased customer retention, with Double Nectar customers renewing
at a higher rate than those opting for non-Nectar qualifying

For instance, home and pet insurance
retention has increased by 10%.

In all, 933m Nectar points were awarded
to Sainsbury’s Finance customers last year.

Teradata’s software platform also
allows Sainsbury’s Finance’s data to be scanned overnight to
highlight changes in customer behaviour to “trigger timely,
targeted marketing”.

Sainsbury’s was the first major UK
supermarket to open a bank, in 1997 in a joint venture with Bank of
Scotland, now a subsidiary brand of Lloyds Banking Group;
Sainsbury’s has over 1.4m active customer accounts.