Walking through its glass doors, I was intrigued by its swanky interior, all done up in red and black with cosy sofas and armchairs, a coffee bar and a baby grand piano in one corner. It looked more like the priority banking lounges I am used to in Asia rather than a typical British bank branch and, in fact, it wasn’t one, at least not just yet.

 

This is one of four Virgin Money “customer experience” lounges that have recently opened throughout the UK (others are in Edinburgh, London and Manchester) as the online bank’s first physical presence on the High Street. As I discovered on my recent visit, these lounges are meant as relaxation spaces for Virgin Money’s existing customers, and the staff were unable to help me with mortgage information. Still, I was offered a very nice cup of tea and a phone to call the bank’s mortgage officers.

 

Come January, though, some of these lounges will be turned into bank “stores” that offer financial services and transactions, when Virgin Money’s £747 million ($1.5 billion) takeover of nationalised bank Northern Rock is expected to be completed. The much-anticipated deal — Virgin Money’s second attempt to purchase the troubled mortgage and savings bank after a failed bid in 2008 — will be the culmination of charismatic entrepreneur Sir Richard Branson’s ambitious plans to play in the big league of High Street retail banking.

 

Few may be aware that Branson’s foray into financial services began in Norwich, when Virgin Direct was set up in 1995 to sell pension equity plans. It grew over the years into an online financial services company offering personal loans, insurance and award-winning credit cards, but it was not until January 2010 that Virgin Money finally obtained a much-coveted banking licence, with its acquisition of regional bank Church House Trust, through which it now offers mortgages and deposits. Seeking further growth, Virgin Money made a first-round bid for 632 branches put up for sale by Lloyds Banking Group earlier this year, but then decided to focus on its bid for Northern Rock.

 

The current deal will see Virgin Money taking over Northern Rock’s 75 branches. Branson has said he intends for Virgin Money to “shake up” British banking by bringing in fresh ideas and looking at things differently. Indeed, when asked how different Virgin Money would be from the market’s incumbents, the enthusiastic staff member I met at the Virgin Money lounge said it planned to engage directly with its customers (through the lounges/stores) and listen to them to find out what their needs are.