CYBG axes banking tech deal with ex-Barclays chief
CYBG, the new owner of Virgin Money, has unsurprisingly cancelled a long-term deal with former Barclays CEO Antony Jenkins’ digital banking start-up.
“10x Future Technologies has been a valuable partner to Virgin Money through its digital journey”
According to Sky News, CYBG, which owns the Clydesdale and Yorkshire Bank brands, told staff late last week that it was in talks to exit a contract with 10x Future Technologies to create an online bank using the Virgin Money brand.
The move is not a major shock as David Duffy, CYBG’s chief executive, had hinted it was likely to use its own tech platform.
As FinTech Futures reported last month, the UK’s Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) gave the green light to the merger of CYBG and Virgin Money.
CYBG is acquiring Virgin Money in a £1.7 billion deal, which will create the UK’s sixth largest bank. It has been already approved by the shareholders.
CYBG has also licensed the Virgin trademark from Richard Branson’s Virgin Group, with the view to combine the operations of both banks under this brand. The CYBG-owned brands, such as Yorkshire Bank, Clydesdale Bank and B (a mobile banking service launched in spring 2016) will disappear. Retail customers will be the first ones to be moved.
As we said at the time, the combined entity will be using CYBG’s technology (migrated in phases over 36 months), including its long-standing core banking system supplied by FIS, a digital platform developed by CYBG for its B app, and a microservices architecture layer.
This latest development is a setback but Jenkins says he has been in talks with investors for several months about a substantial new funding round for his venture. No details on that.
Sky News says Virgin Money is understood to have committed “tens of millions of pounds” to creating a digital platform with 10x’s support, and CYBG’s decision to terminate the deal is likely to trigger a sizeable payment to 10x.
In a statement on Monday (12 November), a CYBG spokesman said: “10x Future Technologies has been a valuable partner to Virgin Money through its digital journey.
“However, since we first announced our proposed acquisition of Virgin Money we have been clear that we plan to use CYBG’s existing iB technology platform – designed for the world of Open Banking – to support our six million customers.”
A 10x spokesman also confirmed the move, insisting that the business was “in good shape, with a strong pipeline and many opportunities ahead of us”.
He added: “We remain focused on the continuing development of our technology platform, having recently carried out the first live real money and merchant transactions across our platform at the end of October.”
10x said it had already signed additional clients, which it declined to name.
In other news today (13 November), Worldpay and CYBG agreed a new five-year referral partnership bringing Worldpay’s payments technology to CYBG business customers.
The bank’s business customers will get access to traditional and mobile POS solutions, and online gateway products.
