Why it could be a great year for bank customers

After so much consolidation in the banking sector, it’s good to see 2010 is kicking off with some new competitors entering the arena.

Today Virgin Money announced that it has bought banking minnow Church House Trust as part of its plans to expand on to the high street. Church House Trust is a tiny bank based in Yeovil, but it provides Virgin Money with the banking licence it needs to expand.

Virgin Money already has 2.5m customers using its credit cards, savings and investment products and general insurance and life assurance products. But Virgin Money wants to expand into mortgage lending and deposits.

Any new competition in the banking sector can only be a good thing for customers, especially when it comes from a company which already offers very competitive products – its credit card has been top of the best-buy tables for months, if not years.

With Virgin Money promising to “increase competition” in the sector and Tesco set to launch its own bank, 2010 could, despite historically low interest rates, actually turn out to be a great year for the bank customer.