Peer-to-peer lender Zopa given green light to launch digital bank

(Image credit: Zopa)

British peer-to-peer lender Zopa is to launch a digital bank after being awarded a full UK licence. The new bank will be offering a fixed term saving account and plans to follow that with a credit card later this year.

Zopa hopes to pull in new customers with the Zopa Fixed Term Savings Account, which will feature competitive rates, can be opened in under 7 minutes and will be protected by the Financial Services Compensation Scheme (FSCS), which safeguards your money up to £85,000.

Formed in 2005, Zopa first unveiled plans to move into digital banking back in 2018, gaining a partial licence in the same year. As part of the regulatory requirements, Zopa has since raised £140m in funding. The company claims to have around 500,000 customers spread across all of its peer-to-peer and investment interests.

Zopa digital bank

The bank will form another aspect of Zopa’s growing range of products and services that will sit alongside its personal and car loan products. Zopa hopes to capitalize on potential customers who’ve had problems managing their finances during the coronavirus pandemic.

The company also released research which found a fifth (20%) of UK adults said they had faced struggles contacting their bank during the Coronavirus pandemic. A third (30%) said they wanted additional flexibility and better guidance from their main bank to help them.

Zopa says it has implemented a series of changes to its services to help customers more rapidly, including a dedicated Covid-19 chatbot.

Jaidev Janardana, Zopa CEO, commented: “Now more than ever the banking industry needs innovative, agile providers who work on behalf of customers. At a time when people want great value, fair financial services products and simple, intuitive digital experience, Zopa offers consumers a compelling and credible alternative they can trust.  

Securing our banking licence enables Zopa to play a wider role in the financial lives of our customers, as well as offering much needed choice and competition to the wider market.”

Via: City AM

Rob Clymo

Rob Clymo has been a tech journalist for more years than he can actually remember, having started out in the wacky world of print magazines before discovering the power of the internet. Since he's been all-digital he has run the Innovation channel during a few years at Microsoft as well as turning out regular news, reviews, features and other content for the likes of TechRadar, TechRadar Pro, Tom's Guide, Fit&Well, Gizmodo, Shortlist, Automotive Interiors World, Automotive Testing Technology International, Future of Transportation and Electric & Hybrid Vehicle Technology International. In the rare moments he's not working he's usually out and about on one of numerous e-bikes in his collection.