The boss of Clydesdale and Yorkshire Banking Group has said the group’s digital business could one day overtake its high street brands as it leads an online push.
Chief executive David Duffy - who is currently mulling over a takeover of rival Virgin Money - said the lender’s digital brand B had already secured more than 170,000 customers and £1.6 billion deposits after its digital-only current account launched last year.
He said it was “certainly an option” for B to eventually become bigger than traditional Clydesdale and Yorkshire brands as it invests heavily in open banking and its digital offering.
“We already have regional brands, but B is geographically neutral and more focused on millennials,” he said. The comments come as CYBG is considering a formal takeover of rival challenger Virgin Money.
Sir Richard Branson’s Virgin Money is also looking to become a player in digital banking, having spent £38.3 million last year developing an app-only offer, adding to the rationale behind a tie-up between the two. Virgin Money’s digital offering is expected to launch in the second half of the year.
The proposed tie-up between CYBG and Virgin Money comes at a crucial time for challenger banks as they look to gain scale to take on the might of the major lenders.
Mr Duffy said: “There’s a bit of a traditional view that big banks are better than small banks, but the world has changed dramatically.
“We see scale as an opportunity, but that’s not our primary goal,” he said.
The digital capabilities of the challenger players is helping set them apart from their larger counterparts, he added.