An end of a long era in Scottish banking is more than a change of name. Clydesdale Bank, founded in 1838, will be consigned to history, re-born under the Virgin Money brand, a placeless but globally-recognised identity and, crucially, considered by customers to be more modern and friendly.
What follows next depends on whether customers are really put in charge of the banking universe or become slaves to sometimes bewildering and faceless new technology.
The switch of name made yesterday’s headlines (and today’s newspapers) although it was signalled at the time of last year’s merger of Clydesdale owner CYBG and Virgin Money. David Duffy, CYBG’s Irish CEO, yesterday put more fat on the bones of the plan, telling those attending the group’s capital markets day that the change of ID was just a door that opened up to a new world of banking.
Indeed, ‘banking’ was also being downgraded in favour of a host of substitute terms to describe a new phase of customer-led financial management with digital self-control being at the heart of how we all conduct our money affairs.
It was clear from a morning of presentations that bankers are no longer masters of the universe. From now on, the plan is to devolve control to each customer and Duffy’s team reeled out the way in which they would begin to manage their personal accounts, mortgages and business banking.
The presentation was over-long and laden too thickly with commitments to ‘deeper relationships’, ‘frictionless experiences’ and ‘integrated relation synergies’, but it was intended to set out the new shape of banking. The tie-up with Virgin scales up the offering by taking both brands into new territory: Virgin steps into business banking (though sceptics wonder if this is a marketing exercise too far) and allows the group to leverage the wider Virgin brand, turning banking into a lifestyle offer. Fundamentally, CYBG wants us to believe we’re now in charge, driven by enabling technology (fintech) which is allowing us to do our ‘banking’ wherever and whenever we like.
This could have been a disguised message that more branches will go, but it really is more than that. The ability to transact while on-the-go or lying in bed has undoubtedly changed the rules.
It has also produced some hard numbers. The changes mean £50m more savings can be produced, while the newly-merged group now boasts 6.4m customers. Mr Duffy says this means Virgin Money has moved from being a ‘wannabe’ challenger bank to being a disrupter.
The ultimate test is whether customers are leading this change, or being led. We’ve heard a lot from bankers about how we’re all moving to online banking yet I counted 17 people waiting to be served in my local branch (not Clydesdale) last week. It can’t be said that everyone is ready to make the switch.