UK-based peer-to-peer (P2P) lender Zopa has introduced a new digital banking business after being awarded with a full banking licence in the UK.
The bank is said to focus on financial needs of UK customers in traditionally underserved sectors, and deliver an experience of a digital-first company.
Zopa Bank intends to offer a suite of new products and services, beginning with a fixed-term savings account that can be digitally opened within seven minutes.
The new fixed term savings account is designed to provide a competitive rate over 1 to 5 years, during times with historically low rates and is protected by the Financial Services Compensation Scheme (FSCS) of up to £85,000.
Zopa Bank to launch credit card within few months
Zopa Bank will sit alongside its existing P2P business Zopa, as part of the overall Zopa Group.
The bank is also planning to roll out a credit card within few months, which includes advanced new features to enable customers control their borrowing.
The new products from Zopa are said to complement the company’s existing offering of personal and auto loans and investment products.
In December last year, the lender secured £140m (181m) funding from IAG Silverstripe, an investment arm of IAG Capital.
Zopa said that the funding enabled the banking entity to fulfil its regulatory capital requirements.
Zopa CEO Jaidev Janardana said: “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.
“Beyond the current pandemic, Zopa is uniquely placed to provide a compelling alternative to traditional banking by leveraging its significant technological and financial services expertise to offer a wider range of great products, including savings and credit cards, alongside its personal loans and investments.”
