Days before the virtual London Marathon this weekend, the Evening Standard spoke to Virgin Money chief executive David Duffy about the pandemic and the threat of a second lockdown.
Virgin Money will sponsor the Marathon, the world’s most popular, for another year after this one.
Duffy worries that a second lockdown would hit small firms in particular, and says government needs to be clear about what is required of them and banks.
How has the bank coped with the pandemic?
I’d say we’ve done well, and we’ve learned a lot. The operational impact of suddenly making sure you can provide full banking services while most colleagues are at home is not one that we’d specifically prepared for. Nor had anyone else of course. I am proud of how we dealt with the disruption and continued to provide a good service to our customers, which included making sure our staff were safe travelling to call centres and branches and that the branches were also a safe environment for customers. When you add the challenge of quickly standing up three government lending schemes with a digital capability, I’d say the banking sector and Virgin Money have demonstrated good resilience.
With the threat of a second lockdown looming, what do banks need from the government?
We’ve seen from research we carried out recently how many small businesses fear a second lockdown. Even without it, there will be some tough times ahead as the banking sector, UK businesses and society continue to adapt to the economic conditions. In terms of what we’re asking government, it’s primarily clarity around what they see as the role of the banks in the longer term, especially with the Brexit transition period ending soon. In simple terms we fuel the economy by supplying credit, so supporting customers in difficult times will be a partnership between banks and the government. Managing investors’ perceptions is also key, who have big questions – what is the prospect of negative interest rates, will banks be able to pay dividends, what are the consequences of Brexit for regulation. So we need to continue the open dialogue. The banks will have to work with the Government and our customers to make sure our communities remain supported and vibrant. I know that we and all of the major banks are committed to playing our part in the economic recovery.
What have you learnt from the last lockdown?
We’ve learnt we’re more adaptable than we thought and able to make big changes quickly, so we’re now focusing on how we can take that model forward permanently. We’ve also learnt about the resilience of our people. We announced last week that we will retain our current working model, where most colleagues work from home, until March 2021 at the earliest. It’s not been straightforward and remains a tough juggle for a lot of people. Winter will bring its own challenges so it’s critical that we pay attention to wellbeing now more than ever. But there are also big benefits, as employees appreciate the flexibility as they look after children, care for older parents, and save time and money on travelling to work.
You’ve finally got some money from the RBS alternative remedies fund? Do you feel justified?
We always thought we were best positioned to improve competition in a meaningful way in the sector, and we‘ve more than pulled our weight in the switching scheme. The team put together a compelling plan for how we’ll help small businesses, and I was pleased the process recognised the difference we can make. We will match the £35m fund, allowing us to build a brilliant digital capability and support our customers more effectively during this volatile environment.
It is the virtual Virgin Money London Marathon this weekend..
It is great that despite all the disruption we are all experiencing that some things – like the Virgin Money London Marathon – can continue, albeit in a different way. We expect 45,000 runners to pound the pavements around the UK this weekend. We’ve got lots of runners raising money via our not-for-profit Virgin Money Giving, like veteran runner Bob Deacon Hertfordshire, who’s now 71 and is running for Mencap dressed as Adam in a skin coloured onesie with a fig leaf to protect his modesty. That money being raised for thousands of charities is as important as ever, and we’re proud to play our part in helping those good causes.
How have the traditional charities struggled?
We know from Virgin Money Giving that the traditional charities have struggled this year. Lots of money went to the NHS charities, including my own donation, which captured the mood of the nation, but the rest of the sector are well down and struggling. The UK’s largest charities have been particularly badly hit by the cancellation or delay in mass participation events, as well as the big drop in corporate fundraising. We’re encouraging people to donate what they can to help plug the shortfall, especially this weekend when so many people are out running their 26 miles all over the country.