Zopa, the UK peer-to-peer lending company that aims to become a bank, has obtained a banking license from UK financial regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). The company wants to expand beyond P2P loans and investments to offer things like savings accounts and credit cards.
Technically, however, this is only the first regulatory part and Zopa’s banking license is “with restrictions” meaning it cannot be fully launched yet. Known as the “mobilization” phase of the licensing process, Zopa is ultimately expected to obtain a full license once it meets various conditions set by regulators.
In a statement, Zopa CEO Jaidev Janardana said acquiring a banking license is the starting point that will allow the company to become a “force majeure” in retail banking. “When we launched the peer-to-peer lending model globally in 2005, we did it by listening to customers and creating a better product for them. We will pay the same attention to our banking products – relying on technological innovation, our values of fairness and transparency, and better customer service, ”he adds.
Once launched, Zopa’s bank will partner with its existing businesses, creating what fintech says is the first hybrid peer-to-peer and digital banking offering. It will deploy a money management application and various financial products.
When the future bank announced the second part of a £ 60million fundraiser last month, a spokesperson told me it would include FSCS-protected savings accounts and P2P investments ( including innovative financing ISAs) for investors, as well as personal loans, finance, and credit cards for people looking to borrow.
Zopa also says it will avoid hidden fees and charges, and emphasizes customer service, provided through its app or over the phone.
However, it remains to be seen whether any of the above will be enough to stand out from an increasingly crowded challenger banking space in the UK which includes Monzo, Starling, Tandem and many more. That said, a fintech nerd can never have enough new banking newcomers.