The financial virgin birth

by Ed Bowsher on 20 December 2010  |  0 comments
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Virgin Money will open its first branches next year.

2011 will be an interesting year in the current account market. The big five banks’ domination of UK current accounts may start to be eroded. Tesco is expected to open its first supermarket-based bank branches and Virgin has today confirmed that its first high street branches will open in 2011.

The first four Virgin branches will be in Edinburgh, Manchester, Norwich and London. The bank plans to open 70 branches within five years.

Now I admit that four branches isn’t a lot. But it’s a start and when you remember that upstart Metro Bank will also be opening new branches next year, it’s clear that the big banks will gradually face more competition over the next few years. That can only be a good thing.

And you can encourage that competition by switching account yourself. The main reason why so many current account customers receive poor service is because the banks know that current account customers are remarkably inert. In fact, research has shown that on average people stay with their current account for a longer period than with their husband or wife.

But if the big banks know that customers are prepared to switch to the new entrants, they’ll have to buck their ideas up and offer a better service. Let’s hope 2011 proves to be the year when the big banks stop taking us for granted.