The Virgin Money Takeover of Northern Rock
Since Northern Rock established as a bank back in 1965, as a merger between two of the North Easts Building Societies, it has really struggled to gain itself a respectable reputation when it comes to customer services and offering its customers an engaging range of mortgage deals and other related financial products. As a familiar face on the British high street Northern Rock has never been one of the brightest stars in the financial sector has seen more than its fair of complaints investigated by the Banking Ombudsman and the Office of Fair Trading. In particular, Northern Rock gained itself a substantially poor reputation when it came to mortgage applications; not only were the bank slow in processing and approving new mortgages but they were also inefficient at delivering good deals to new or existing customers. This poor customer services and inefficiency were soon put to the test when Northern Rock became the first financial institution in over 150 years to suffer a bank run and had to turn to the Bank of England, and eventually the tax payer, to gain some form of financial stability. It was a strategy of high risk that eventually brought Northern Rock to their knees. Giving out 125% mortgages certainly made the bank a popular option for prospective home buyers, but in the long term, it was a risk that failed to pay dividends for the bank itself.
While the history and reputation of Northern Rock has been somewhat rocky, the recent takeover by Sir Richard Branson will certainly breathe new life not only into the bank, but also into the banking and financial sector as a whole. Never afraid to take on a new challenge, Richard Branson certainly knows a thing or two about branding, marketing, and indeed, how important it is to have exceptional customer relations. After all, when it comes to banking, gaining an outstanding reputation and providing customers with mortgage products that are accessible and realistic is what the business is all about. However, in a sector that is already saturated with banking institutions, what will make Sir Richard Branson and his new Virgin Money brand something to shout home about? Well, for one, Virgin and the Virgin name has a reputation for success and as a modern and forward thinking brand, it is a popular notion among consumer groups that Sir Branson and his top team of visionaries at Virgin Money have the ideas and capabilities to really shake up Northern Rock and turn it into a bank that rivals all others on the high street. Since the initial take over in January this year Virgin Money has understandably been a little slow in implementing radical changes. There is a vast amount of red tape to get through in the world of banking and finance, but changes are happening and products are becoming competitive in the current market place. Welcomed by both consumers and personal finance experts, Virgin money are offering a simplistic approach to its products and services. Expressing their savings products as “simple, fair and transparent” by Virgin Money chief executive Jayne-Anne Gadhia, the group seem to be hitting the nail on the head when it comes to providing a financial service and products that are accessible, clear and fundamentally, as customer focused as possible. With an attractive head line rate and no frills attitude offering good value for customers, Virgin Money already have a range of financial products that are set to rival the competition. While we are only a few months into the Virgin Money takeover of Northern Rock it is a move that has been welcomed by many and I for one think it will be interesting to see where Sir Richard Branson takes his newly acquired business in an effort to become one of the best banking and mortgage providers within the UK.