Virgin Money Plans First Concrete Step Into SMB Banking

Virgin Money is, once again, aiming to disrupt the U.K.’s small business (SMB) banking market.

According to news from The Financial Times on Thursday (Nov. 16), Virgin Money confirmed what its Chief Executive Jayne-Anne Gadhia described as “the start of our journey into SME banking.”

The challenger bank said it will launch a small business savings account in January, which will “enable us to start developing relationships with business customers and lay the foundations for potential broader future development in this attractive, but poorly served, market,” added Gadhia.

The savings account would be the first concrete move by Virgin Money after months of talk about entering the small business banking market. In early 2017, the firm told the Financial Times it would explore working with RBS to step into the market. Before that, in the wake of the Brexit vote, Virgin Money similarly spoke of such plans.

Virgin Money’s plans also come at a time of change in the U.K.’s small business banking sector. As more challenger banks emerge, traditional financial institutions (FIs) HSBC and RBS have faced scandals concerning their SMB banking operations.

HSBC incorrectly froze some small business accounts as a result of anti-money laundering compliance, while RBS has endured an ongoing probe by the Financial Conduct Authority (FCA) over allegations it forced some of its small business customers into failure after pushing them into its Global Restructuring Group. Reports last month suggested the FCA’s investigation into the matter is ongoing.