CYBG to shake up challenger bank market with $1.6 billion offer for Virgin Money

The scale economies of TSB and RBS, have not been serving their customers at all well recently. 

What the consumer needs is new competition between challenger banks and established banks to get the established banks to raise their game rather than just acquire the challengers to kill the threat.

For years, I've observed the following FI Innovation Playbook: Don't drink the Kool-Aid of every shiny new technology; Wait & watch for fintech winners; Buy / make only what works. We saw it earlier in Prepaid Card with eCount, in Gift Card, with Revolution Money; and most recently, in Mobile Wallet, with Zelle. We're seeing it again in this potential deal between CYBG and Virgin Money.

This playbook works very well. Direct-to-Consumer Fintechs chant the disruption mantra only to raise VC funds at frothy valuations. The moment they get an opportunity to flip their companies, they sell out to traditional banks - and out goes all their song and dance about taking care of consumers' interest yada yada yada.  

Consumers may be justified in wanting traditional banks to up their game but they're naive to expect it to happen via this neobank / challenger bank movement.

I agree with your observations Katharaman, however just take a look at the Banking Royal Commission in Australia and see why the shine has diminished in FI!

@Paul Vieros:

TY for your comment. I Googled "Banking Royal Commission" and the first result was "The real problem with royal commissions" (http://ow.ly/sZsr30k0iv2).

Should I bother to read this article?:)