He’s revolutionised the music business, elevated air travel into space and built an instantly recognisable global brand. Now, Sir Richard Branson is on a mission to breathe new life into retail banking through his Virgin Money venture. Future Banking talks to the world’s most laid-back billionaire about restoring consumer faith, the significance of social media and people-centric finance.
Future Banking: You mentioned that you would like to see Virgin's Student brand expand into everything, including banks - is Virgin Money how you would have envisioned this?
Richard Branson: Virgin has a strong history of going into markets where there is an opportunity to make things better for consumers. We've been doing it for 40 years, with some real milestone moments along the way, from our first steps in the record industry to launching Virgin Atlantic. Now we want to do the same for banking through Virgin Money. I was recently at the Gosforth offices and must say I am very impressed by how the Virgin and Northern Rock businesses have been successfully integrated.
What was your vision when putting together a strategy for Virgin Money?
We want to build a different kind of bank, one that puts customers at the heart of the business. That is the approach we are taking with Virgin Money; focusing on providing customers with straightforward, transparent products and high-quality service.
What do you feel Virgin Money has learned from other banks?
People have become fed up with banks and bankers, and want something better. As a result, there is a real opportunity for Virgin Money to provide a viable alternative for customers. Price is clearly an important factor, but many customers are looking for more than that. They want an attractive package comprising service, transparency and long-term value - that's what Virgin Money is focused on.
What are the biggest problems facing the banking sector and how does Virgin Money intend to win back trust in the industry?
Consumers have feeling a serious loss of confidence in financial services, particularly the established banks, as a consequence of the financial turmoil of the last five years.
Banks in the UK have not focused on the consumer side of their businesses, as they have looked for growth from other areas such as investment banking. That underinvestment has led to a situation where many customers are unhappy and trust has faltered. I think it is essential that trust is re-established at the heart of the relationship between banks and the wider community, and Virgin Money has the opportunity to play a significant role. The early signs are good, with over 1.2 million customers opening new accounts in 2012.
Do you have plans for the rest of Europe yet?
Our key focus is on the UK at the moment. We don't have any plans to move into Europe at this stage, although there are clearly opportunities beyond the UK market and we already have successful Virgin Money businesses in South Africa and Australia.
You have been developing the Virgin current account. What changes can we expect to see?
We are working hard on building our current account proposition. We want to create straightforward and no-nonsense current accounts with no sting in the tail. This is the starting point of all our services - fair and transparent. Beyond that, you'll have to wait and see.
What are the biggest problems you face when it comes to the customer experience?
Customers rightly have high expectations when they deal with a Virgin company - the biggest challenge is in living up to those expectations.
You recently passed a million followers on LinkedIn and three million on Twitter. How significant a role will social media play in Virgin Money?
Social media already plays an important role in the way Virgin Money keeps in touch with customers. People regularly tweet and message us about their products, or experiences in our [Virgin Money] stores and lounges, through Twitter, Facebook and Google+. It's great to get real-time feedback through social media, as well as the opportunity to keep people up to date on what we're doing across the bank, our online giving platform and also the events we sponsor. It is a great way to talk directly to our customers.
How much of a barrier are rules and regulations governing social media activity for banks?
It's not really a barrier, but as with all our contact channels we need to make sure we keep our customer details safe and ensure the correct ID checks are carried out. Social media isn't suitable for advertising financial products; it is much more about having conversations and providing engaging information for customers.
Which lessons learned from your other verticals do you intend to apply to Virgin Money?
One of the similarities across all Virgin companies is the focus on making things better for consumers. A successful business is one that tries to make a real difference to people's lives, and tries to improve quality and service. It is always important to have honest, direct and straightforward communication and to make sure you follow up on what you say you are going to do - people will trust you and follow you if you do this. We've been doing it for more than 40 years, and want to apply those principles and our experience to banking.
Where do you see Virgin Money in ten years' time?
In ten years' time, Virgin Money will be a full-service retail bank, providing a broad range of products to customers across the UK. That will include current accounts and potentially business banking as well. But our philosophy will be the same - providing customers with an attractive package of service, transparency and long-term value.