MSE News: Virgin Money owner Sir Richard Branson vows to improve banking

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"The firm aims to challenge the banking industry's 'big five' following its takeover of Northern Rock ..."

Read the full story:
Virgin Money owner Sir Richard Branson vows to improve banking

Reaper

Sounds familiar. Virgin Direct was set up to challange the big five banks and brought out the innovative Virgin One account to do it, only to sell out to RBS in 2002.

This time they lack even a new product so I can't see where the challenge is going to come from. From a bunch of old rescued bank branches? I think it will take more than that though it would be nice to be proved wrong.

tyllwyd

We had a Virgin One account - which became a One Account from RBS - and a Virgin Money life insurance policy - sold to Windsor Life. I can't get excited by any promises of change from Richard Branson.

danothy

Didn't Branson say something along the lines of wanting to make trains the most desirable way to travel in the mid to late 90s? I won't disagree that the Virgin enterprises have a way of changing the market, but it seems to me that there is often an overstatement of expected effect.

KTF

Here are a list of the things they will do 'better':

• By genuinely caring about you and your money. Not rushing in to sell to you.
• By putting customer service ahead of cost-cutting. People ahead of account numbers.
• By creating straightforward, no-nonsense products. With the reassurance that there’s no sting in the tail.
• By making a fair profit. Not an excessive one.
• Above all, we'll use our expertise with money to do some good in the world.

Source: http://uk.virginmoney.com/virgin/northern-rock/40-years-of-better.jsp


Aside from the last two, sounds a lot like First Direct. I would like to see them define what a 'fair' profit is and the last one is just marketing puff imo.

liam_h

Having worked for a company that is no longer part of the Virgin group, I know exactly how he works.

He buys or creates a company which will change the field it is in. Once the company is established, has a good customer service record (this is very, very important to him) and has met all of the targets he has set, he will sell it on to another company for it to be rebranded so it has no future ties to the virgin group. This will be what he does here.

callum9999

Reaper wrote: »

Sounds familiar. Virgin Direct was set up to challange the big five banks and brought out the innovative Virgin One account to do it, only to sell out to RBS in 2002.

This time they lack even a new product so I can't see where the challenge is going to come from. From a bunch of old rescued bank branches? I think it will take more than that though it would be nice to be proved wrong.

Why would they need a new product? I honestly can't think of a single financial service I'd use that doesn't already exist - what exactly do you think they could come up with?

Presumably the "challenge" to the banks will be on the lines of Metro Bank. (Aiming for) better customer service, better branch opening times etc. and possibly things like zero currency charges, low penalty charges, good interest accounts etc.

opinions4u

danothy wrote: »

Didn't Branson say something along the lines of wanting to make trains the most desirable way to travel in the mid to late 90s? I won't disagree that the Virgin enterprises have a way of changing the market, but it seems to me that there is often an overstatement of expected effect.

The Virgin Trains service between London and Manchester is massively better than it ever used to be before he got involved.

That said, the price for peak time travel isn't exactly generous to the consumer!

pmduk

This is the same Branson that undertook to sort out litter, promised double decker trains on the London-Brighton rail route (until asked how they'd cope with bridges) and applied for an AM radio licence then complained that it was broadcast on AM. The man's a buffoon. He's got more failures behind him than Fred the Shred. His hot air ballooning only succeeds because of the hot air he himself produces.

Reaper

callum9999 wrote: »

Why would they need a new product? I honestly can't think of a single financial service I'd use that doesn't already exist - what exactly do you think they could come up with?

That's kind of my point. What is his unique selling point? No new products are on offer, and First Direct and Metro Bank are already targeting the good customer service angle. To challenge the entrenched banks you need to do something better than them to capture market share. I can't see anything with substance that will achieve that.

Presumably the "challenge" to the banks will be on the lines of Metro Bank. (Aiming for) better customer service, better branch opening times etc. and possibly things like zero currency charges, low penalty charges, good interest accounts etc.

Better interest rates would work, but they are costly and therefore tend not to exist alongside other costly measure like longer branch opening hours and good customer service. At least not if you want to make a profit.

Pug4

If Sir Richard wants to be remembered as both entrepreneur and peoples friend, following his company's acquisition of Northern Rock, he might want to start educating secondary school children as regards the world of finance. Our son left high school last summer and, apart from what we've told him (he didn't know how to use a bank card / ATM and had little knowledge of savings and interest) after starting a part time job to help support his future ambitions of becoming the next mogul, had very limited skills as regards managing his money (our lad, by the way is a bright GCSE Maths and Science student currently aiming towards A level and, hopefully, uni.) I really do think that if Sir Richard wants to change how banking is done / perceived, whatever in the UK, then he / we need to start educating all of its future customers, at school before they are chucked into the murky world of it.