Zopa, the P2P pioneer that has long brandished its non-bank credentials, has applied to UK regulators to become...a bank.
The application for a banking licence will be made to the Prudential Regulation Authority (PRA), and the Financial Conduct Authority (FCA), Jaidev Janardana, CEO of Zopa says.
“The regulatory authorities in the UK have created an environment that encourages innovation, the adoption of new technologies and an increase in competition in the banking sector," he says. "Zopa has a history of creating innovative retail-facing financial services, driving consumer choice and transparency. We are responding to the positive regulatory environment and building on our experience to bring yet more choice to the market.”
At launch, Zopa Bank will extend the company’s existing suite of investor and borrower products by offering FSCS protected deposit accounts to savers and overdraft alternatives to borrowers. It will also provide the company with a diversified source of funding for its lending platform.
Zopa, which presided over £1.8bn in loans on its P2P platform since inception in 2005, moved into profitability just last month.
Says Janardana: “We are uniquely placed to re-define customer expectations of what a bank should deliver in the 21st century. Over the last 11 years we have delivered great value to borrowers and investors whilst prudently managing credit risk. Combining our pioneering data and tech-led culture with an obsession with fairness and customer experience, we are best placed to shape the future of personal finance in the UK.”