Zopa
Auto Added by WPeMatico
Zopa granted full UK bank license as it gears up to launch savings account and credit card
Zopa, the 15-year-old peer-to-peer lending company, is announcing that it has been awarded its full U.K. bank licence, as it gears up to launch a fixed-term savings account, followed by a credit card.
Dubbed “Zopa Bank,” the new challenger bank will sit alongside its existing peer-to-peer lending business, under Zopa Group, creating what the veteran fintech previously described as the first hybrid peer-to-peer and digital bank offering.
Zopa had provisionally acquired a U.K. bank license in December 2018 “with restrictions,” the first major milestone in the licensing process. The full license, which required Zopa to raise a further £140 million late last year in a round led by IAG Capital in order to meet capital required to become a bank, means it can now launch more widely.
“The Zopa Fixed Term Savings Account offers a competitive rate over 1-5 years at a time when rates are at a historic low,” says the upstart bank. “The account can be opened in as little as 7 minutes online and is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000.”
Next, Zopa says it plans to introduce a credit card in the coming months, which will include “innovative new features designed to put customers in control of their borrowing.”
“The card will address the needs of customers who have had to put up with poor service and unclear pricing from their existing card providers. These new products will sit alongside Zopa’s existing offering of personal and auto loans and investment products,” says Zopa Bank.
Whether or not a new challenger bank, even one with Zopa’s established brand, can cut through the noise this late in the race remains to be seen. The challenger bank space in the U.K. is crowded, to say the least, including burgeoning household names like Monzo and Starling, and to a lesser extent, Tandem, which on the surface looks to be Zopa’s most direct non-legacy competitor.
Powered by WPeMatico
Zopa, the UK P2P lending company, closes £60M round on path to launching a bank
Obtaining a banking license and then launching an actual new retail bank requires capital. A lot of capital. Enter Zopa, the U.K. peer-to-peer lending company that wants to become a bank, which today is announcing that it has closed £60 million in further funding. Only £16 million is actually new new money, having already disclosed £44 million in August, so this is effectively an extension of that earlier fund-raise.
The purpose remains the same, however: Zopa says it will use the latest round of investment toward the capital needs for its yet-to-launch “next generation bank.” The company began applying for a bank license with the U.K. regulators in 2016. The new funding also comes off the back of what the fintech claims is its sustainable and profitable peer-to-peer business, having achieved full-year profitability in 2017 for the first time since 2012.
An early mover in the space — launching all the way back in 2005 — Zopa says it has served nearly half a million customers, either through loans or investing in peer-to-peer loans. It has lent more than £3.7 billion in unsecured personal loans to customers in the U.K.
The next phase of Zopa is all about becoming a new digital bank, alongside its peer-to-peer business, in order to be able to offer “a unique and broader set of products to customers.”
“Our bank will allow us to give more people a better experience with their finances by introducing more simple, fair products — like savings accounts and credit cards,” a company spokesperson tells me.
At launch this will include offering FSCS-protected savings accounts, and P2P investments (including IFISAs for investors), and personal loans, car finance and credit cards for people looking to borrow.
“Our money management app will offer our customers a more personalised approach to managing their money,” adds the spokesperson.
Cue Jaidev Janardana, Zopa CEO (pictured above): “This new funding takes us a step closer to realising our vision of being the best place for money in the U.K. Having served half a million customers to date, Zopa is set to redefine the finance industry once again through our next generation bank to meet a broader set of U.K. customers’ financial needs.”
Powered by WPeMatico