Simon Read: At last we will have credible challengers to the greedy banks

So Virgin Money is finally set to launch its challenge to the high street banks after snapping up Northern Rock for £747m on Thursday. The deal won't actually go through until 1 January 2012 and then there will be a six- to nine-month process of rebranding the 70 or so branches that Northern Rock has.

But that means that the name of the former building society and collapsed bank will disappear from our high streets. Is that a reason to weep? Of course not. The name is synonymous with the credit crunch and global banking collapse. As such it's become a devalued and disgraced brand.

So what about the upstart that will replace it? Interestingly the Virgin brand is actually almost as old as the Northern Rock name. The building society was only created in 1965, from a merger between the Northern Counties Permanent Building Society and the Rock Building Society. (Admittedly, both of them had proud histories, which stretched back a century or more.)

Richard Branson created his Virgin brand only five years later when he opened a small Virgin Records and Tapes shop in Notting Hill. So Virgin has almost as much tradition behind it as Northern Rock. But, crucially, it hasn't been tainted by the financial scandal.

It means Virgin Money has the opportunity to offer a credible alterative to the traditional banks. To do so it needs to offer competitive products and decent service. It needs to build on the values that Branson has stood for over the past four decades but add a layer of additional trust that the big five banks have lost.

With only 75 branches in total and many of them in the north, the new outfit won't be able to compete in terms of branch banking. But when I chatted to senior officials at Virgin Money this week, they seemed confident that their future network of branches – albeit much smaller than any of the big five – will be enough to launch a credible alternative.

I hope that Virgin Money is up for the challenge. As customers we need a fresh banking alternative on the high street. To date our best hope for that has been the likes of the Co-operative Bank or the little London-based Metro Bank.

The former is still waiting anxiously to hear the outcome of its bid for the 600 or so branches that Lloyds Banking Group is being forced to sell off. News of that may not emerge until the New Year, but if the Co-op is successful, it could end up with almost 1,000 branches. That's more than enough to be seen as a major rival to the other banks.

Metro, meanwhile, has some great ideas behind the hoopla and hype of its balloons and dog bowls. Not least is the fact that you can walk into any of its branches and have a new debit card printed and made for you there and then. For those of us used to having to wait a week or more for our bank to send out new plastic, being able to walk into a branch and walk out with a new card minutes later is a great bit of customer service.

But Metro has only nine branches. And they're all in London. It also, as yet, has no online presence and has, reportedly, only provided 100 mortgages to customers since being launched some 15 months ago. That all adds up to an interesting sideshow so far rather than a real alternative.

So our hopes – for now – lie with Virgin. Jayne-Anne Gadhia, Virgin Money's chief executive, set out a promising statement of intent this week, saying: "We are aiming to build a true banking alternative for the UK consumer, one centred around our ambition to make everyone better off."

If they succeed in shaking up the banking market we all will be better off. If the Co-operative is successful in its bid for the Lloyds' branches as well, then, by next summer, we could have two serious challengers to the big five banks. For the sake of future generations of banking customers, I hope that Virgin Money and the Co-op both prove a success.

s.read@independent.co.uk