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.

Download this free guide

Is blockchain really going to be the new database?

In this e-guide, read about how blockchain's inherent security makes it a key player in the future of tech yet is still susceptible to spammers and phishers.

Start Download

• Corporate E-mail Address:

  You forgot to provide an Email Address.

  This email address doesn’t appear to be valid.

  This email address is already registered. Please login.

  You have exceeded the maximum character limit.

  Please provide a Corporate E-mail Address.

• • I agree to TechTarget’s Terms of Use, Privacy Policy, and the transfer of my information to the United States for processing to provide me with relevant information as described in our Privacy Policy.

  Please check the box if you want to proceed.

• • I agree to my information being processed by TechTarget and its Partners to contact me via phone, email, or other means regarding information relevant to my professional interests. I may unsubscribe at any time.

  Please check the box if you want to proceed.

By submitting my Email address I confirm that I have read and accepted the Terms of Use and Declaration of Consent.

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.