Virgin Money spent £38.3 million last year building the technology backbone for its new digital challenger bank.
Virgin Money is aiming to broaden its appeal in the SME market and extend its offering into current accounts and savings through the creation of a "data-driven, customer-centric" digital bank. The company says it aims to take advantage of the technological and regulatory changes shaping UK retail banking, including the introduction of PSD2.
"The 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," says the company in its results statement. "In addition to our current presence in the mortgage, credit card and retail deposit markets, the digital bank will allow us to expand into the current account and linked primary savings markets."
Virgin Money signed a contract with 10x Future Technologies, the fintech startup established by former Barclays chief Antony Jenkins, in November 2016 to build a digital core for the new business.
The vendor's API brings legacy systems together into a single secure network, which will help Virgin Money to pull together all the relevant data about a customer - such as existing finances, lifestyle preferences and risk tolerance - to find them the best product such as a mortgage in a fraction of the time it currently takes.
The new bank is expected to see the light of day in the second half of 2018. Jayne-Anne Gadhia, Virgin Money chief, says: "Broadening 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."