Virgin Money has partnered with mobile money provider Monitise to provide customers with mobile banking solutions.
Monitise, which provides digital banking products to firms in the banking, payments and mobile sectors, has already partnered with the bank to provide a mobile application for Virgin Money Giving.
The seven-year contract is aimed at helping Virgin Money move into the mobile banking space.
Alastair Lukies, co-chief executive officer at Monitise, said: “The Virgin brand is synonymous with success and ambition across all of the sectors it operates in, and banking is no different. There are significant opportunities ahead for Virgin Money in the digital space.”
Virgin Money has been behind on development in recent years. In 2013 it extended a contract with Fujitsu – originally signed by Northern Rock – to prolong the life of its mainframe system until 2018.
Many banks avoid updating legacy systems due to the risk of IT failure and downtime, making innovation increasingly difficult.
The Payments Council is addressing these shortfalls by forcing banks to retry the payments later in the day to prevent consumers being charged £200m a year in penalties due to slow payments processing.
More on payments
The Financial Conduct Authority (FCA) is planning to open the payments sector to new companies to improve competition and encourage banks to update these legacy systems.
There have been many developments in the alternative payments industry over the last year, and Virgin Money is behind the likes of Barclays, Paym and Apple when it comes to alternative and mobile payments.
Barclays bank has already launched its own Pingit mobile application, as well as biometric authentication and video banking.
And Paym predicts it will process a billion payments by 2018, and already supplies approximately 1,450,000 customers.
But is it already too late for Virgin Money? A survey by Netbiscuits found the launch of Apple Pay could increase use of near field communication (NFC) devices for activities such as mobile payment, leaving other firms behind.
Jayne-Anne Gadhia, chief executive officer of Virgin Money, said: “We are excited to be extending our quest for smarter, brighter and better banking solutions with a partner that shares our ambition to bring unique, intuitive and valuable service features to our customers.”