The expected launch of the challenger bank is in the second half of 2018, and in 2017 the company spent GBP 38.3 million developing this new proposition. Core banking start-up 10x Future Technologies is a partner in developing the bank. Virgin Money wants to appeal to SMEs and increase its offerings to include current accounts and savings products.

Virgin Money indicated that they were motivated to go into digital banking by technological and regulatory changes that were occurring in U.K., including the recently-live PSD2.

Regarding the technological underpinning of the new bank, 10x Future Technologies’ API collects legacy systems under a single and secure umbrella. This system functionality assists Virgin Money in providing its customers with the most relevant services through centralising data collection, which will help carry out the company’s goal of creating a data-driven bank that centres the customer.

In its results statement, the company spoke on how technology will be used to enhance customer experience by saying that, “[t]he Virgin Money digital bank will be underpinned by next generation technology and architecture, offering customers a Universal Account that can be personalised to create a unique proposition tailored to individual needs.”

Additionally, regarding customers, Jayne-Anne Gadhia, CEO of Virgin Money UK, indicated that, “[b]roadening our customer appeal through the development of our SME and digital bank propositions will provide access to a wider pool of UK retail banking revenues and further diversify our funding base.”

Virgin Money’s new banking endeavor will face competition from established challenger banks such as Monzo, Revolut, Starling Bank, Atom, and Tandem.

For more information on challenger banks in the U.K., follow this link.

By Elliot Lyons, Research Analyst