Peer-to-peer lender to launch bank

Peer-to-peer lender Zopa has announced it intends to launch a bank as it looks to enhance its business.

The lender revealed it will be applying for a banking licence with the regulatory process expected to take 15-24 months. 

Next Generation Bank will sit alongside Zopa’s current peer-to-peer business and it intends to offer Financial Services Compensation Scheme-protected deposit accounts and revolving credit products to supplement existing loans and peer-to-peer investor products.

Jaidev Janardana, CEO of Zopa, said the Prudential Regulation Authority and Financial Conduct Authority had created an environment which encouraged innovation in the banking sector.

“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.”

Zopa hopes its bank will extend the company’s existing suite of investor and borrower products as well as providing further diversified sources of funding for the platform.

“We have built a profitable, scalable and viable business,” Jaidev added.

“Yet we’ve only just begun. 

“We want to launch a next generation bank to drive greater choice for borrowers, savers and investors, which is good for consumers and good for the economy.”

Zopa has lent over £1.8bn since launching in 2005 and Jaidev concluded: “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, while 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.”

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