UK’s Virgin Money has planned for a digital bank beta-testing in the second half of this year with a possible roll out in the next year.
It noted that in the last one year, Virgin Money spent £38.3m to develop the technology to support its new digital challenger bank.
The company aims to expand in the SME market and extend its current offerings into current accounts and savings by creating the digital bank.
In November 2016, it has signed a contract with fintech start-up 10x Future Technologies to develop this technology.
The initiative is expected to receive support from Europe’s open banking regulation PSD2, which was introduced last month.
In a statement, Virgin Money said: “The Virgin Money digital bank will be underpinned by next generation technology and architecture, offering customers a Universal Account that can be personalised to create a unique proposition tailored to individual needs.
“In addition to our current presence in the mortgage, credit card and retail deposit markets, the digital bank will allow us to expand into the current account and linked primary savings markets.”
Virgin Money also released its annual results where the company reported an underlying profit before tax of £273.3m, an increase of 28.1% compared to £213.3m in 2016.
The entity’s total income also soared from £586.9m to £666m this year, registering a 13.5% year on year increase.