Will we see the emergence of new banking institutions in the UK?

News that a group of Scottish investors have ploughed £10 million into the relatively unknown Airdrie Savings Bank has caught many in the financial industry by surprise. There is now a feeling that the strained relationship between high street banks and UK consumers has created something of a gap in the market which could allow new banking institutions to grab the trust and the business of some consumers.

While there are many hoping that new institutions in the banking arena will help to increase competition and increase the flow of liquidity into the consumer market, the truth is that the mainstream banks will always hold the upper hand. These are banking institutions which have literally been around for hundreds of years and have built up reserves and investor confidence which no new start could ever match. That is not to say that even the smallest increase in competition cannot make a difference, just the fact that eventually mainstream and high street banks will yet again regain their power.

When you consider that the likes of the government, Bank of England and various consumer and business driven parties have all attempted to force more liquidity from the banking arena, and failed, this perfectly illustrates the strength of the UK banking industry.