Simon Read: At last we will have credible challengers to the greedy banks

 

So Virgin Money is finally set to launch its challenge to the high street banks after snapping up Northern Rock for £747m on Thursday. The deal won't actually go through until 1 January 2012 and then there will be a six- to nine-month process of rebranding the 70 or so branches that Northern Rock has.

But that means that the name of the former building society and collapsed bank will disappear from our high streets. Is that a reason to weep? Of course not. The name is synonymous with the credit crunch and global banking collapse. As such it's become a devalued and disgraced brand.

So what about the upstart that will replace it? Interestingly the Virgin brand is actually almost as old as the Northern Rock name. The building society was only created in 1965, from a merger between the Northern Counties Permanent Building Society and the Rock Building Society. (Admittedly, both of them had proud histories, which stretched back a century or more.)

Richard Branson created his Virgin brand only five years later when he opened a small Virgin Records and Tapes shop in Notting Hill. So Virgin has almost as much tradition behind it as Northern Rock. But, crucially, it hasn't been tainted by the financial scandal.

It means Virgin Money has the opportunity to offer a credible alterative to the traditional banks. To do so it needs to offer competitive products and decent service. It needs to build on the values that Branson has stood for over the past four decades but add a layer of additional trust that the big five banks have lost.

With only 75 branches in total and many of them in the north, the new outfit won't be able to compete in terms of branch banking. But when I chatted to senior officials at Virgin Money this week, they seemed confident that their future network of branches – albeit much smaller than any of the big five – will be enough to launch a credible alternative.

I hope that Virgin Money is up for the challenge. As customers we need a fresh banking alternative on the high street. To date our best hope for that has been the likes of the Co-operative Bank or the little London-based Metro Bank.

The former is still waiting anxiously to hear the outcome of its bid for the 600 or so branches that Lloyds Banking Group is being forced to sell off. News of that may not emerge until the New Year, but if the Co-op is successful, it could end up with almost 1,000 branches. That's more than enough to be seen as a major rival to the other banks.

Metro, meanwhile, has some great ideas behind the hoopla and hype of its balloons and dog bowls. Not least is the fact that you can walk into any of its branches and have a new debit card printed and made for you there and then. For those of us used to having to wait a week or more for our bank to send out new plastic, being able to walk into a branch and walk out with a new card minutes later is a great bit of customer service.

But Metro has only nine branches. And they're all in London. It also, as yet, has no online presence and has, reportedly, only provided 100 mortgages to customers since being launched some 15 months ago. That all adds up to an interesting sideshow so far rather than a real alternative.

So our hopes – for now – lie with Virgin. Jayne-Anne Gadhia, Virgin Money's chief executive, set out a promising statement of intent this week, saying: "We are aiming to build a true banking alternative for the UK consumer, one centred around our ambition to make everyone better off."

If they succeed in shaking up the banking market we all will be better off. If the Co-operative is successful in its bid for the Lloyds' branches as well, then, by next summer, we could have two serious challengers to the big five banks. For the sake of future generations of banking customers, I hope that Virgin Money and the Co-op both prove a success.

s.read@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
    Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

    Laughter, but no tears, as Letterman takes his bow after 33 years

    Veteran talkshow host steps down to plaudits from four presidents
    Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

    Hozier's 'blasphemous' song takes Novello award

    Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
    Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

    Join the tequila gold rush

    The spirit has gone from a cheap shot to a multi-billion pound product
    12 best statement wallpapers

    12 best statement wallpapers

    Make an impact and transform a room with a conversation-starting pattern
    Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

    Paul Scholes column

    Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?