If Virgin Money combines with Clydesdale and Yorkshire its digital bank project could be canned
I was chatting to a banking industry contact recently and was told that if the Clydesdale and Yorkshire Group (CYBG) bank merger with Virgin Money goes ahead, the project to create a digital bank at the latter will be scrapped.
In February Virgin announced its plan to build a digital bank. At the time Virgin Money CEO Jayne-Anne Gadhia said: “As part of this strategy, we are developing a data-driven, customer-centric digital bank, which will allow us to take advantage of the significant technological and regulatory changes shaping UK retail banking, broaden our customer appeal and provide access to a wider pool of UK retail banking revenues.”
The bank also said it has spent over £38m on developing a digital banking platform, which it said will harness data to offer customers personalised accounts. This is an aim to expand its retail banking customer base, as well as the number of small business customers it serves.
But if the merger with CYBG goes ahead it will find itself in possession of two digital banks, well one and a half perhaps, because CYBG has an existing digital bank. This is app based and known as B, which has 200,000 users already.
So the choice would be run two digital banks, scrap an established one with 200,000 users, or can the new digital bank project.
A spokesman at Virgin Money told me the next stage of the merger process is the shareholder vote and until then “nothing has been decided.
And a spokeswoman at Clydesdale and Yorkshire bank also said there has been no decisions as yet.