Virgin Money, which took over Northern Rock and is now seen as one of the UK’s leading “challenger banks”, fighting to build market share, has agreed a new five year contract with Fujitsu. Fujitsu will continue to licence its Virtual Machine Environment (VME) to Virgin Money. The VME mainframe system will support new product releases and underpin the bank’s processing systems.
Virgin Money, along with the other UK banks, is entering an extremely dynamic period. For example, from mid-September they will all have to provide faster and easier current account switching, creating more direct competition between banks for high net worth customers. Virgin Money is working on a range of current accounts to take advantage of this change. In addition, there is a revolution under way in the use of mobile for payments and for managing bank accounts.
Fujitsu has invested in its VME technology to reduce costs, increase stability and enable better inter-connection into other systems. The bank’s mainframe environment will thus be more able to exploit modern platforms and enable Virgin Money to take advantage of new market opportunities. The company is also providing the strategic and technical consultancy services to the bank as well as support and maintenance services. For Fujitsu this is both an endorsement of their product investment and rewards their recent effort in the private sector, further building on better UK performance.
Similar deals can be anticipated across the sector as banks and other financial institutions wrestle with the problems of addressing new markets while being dependent on large legacy systems.