But the bank will be on stabilisers for a while yet.
After a little over two years of waiting, the world’s first peer-to-peer lending platform Zopa has been granted a banking licence.
The pioneering firm first announced that it would apply for a licence in November 2016, promising a ‘next generation’ bank account.
But Zopa’s mission is not necessarily to build a competitor to the likes of Monzo and Starling Bank – which are best known for their current accounts. Zopa’s primary reason for launching a bank (expertly detailed here by Andy Davis) is to allow it to move into offering credit cards and savings accounts.
The new service will sit alongside its existing P2P business, and the two entities have separate boards.
Zopa will begin rolling out its new products – an FSCS-protected fixed term savings product, credit card and money management app – next year. As far as we’re aware, the money management piece had not previously been mentioned by the company.
At first, Zopa’s newfound permissions will be somewhat restricted. It must complete a ‘mobilisation’ phase during which the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) will maintain close oversight. Should it meet the conditions set by both regulators during the mobilisation phase, Zopa will be granted a full banking licence.
Jaidev Janardana (pictured), CEO of Zopa, said in a statement: “Acquiring our banking licence is the starting point for Zopa to become a major force in retail banking. When we pioneered the peer-to-peer lending model globally in 2005, we did so by listening to customers and creating a better product for them. We will bring the same focus to our banking products – drawing on tech innovation, our values of fairness and transparency, and better customer service to help even more people to feel-good about money.”
The thirteen-year old Zopa closed its largest fundraise to date in November, scooping £60m from a gaggle of investors including listed investors TruFin and Augmentum. These funds will go towards the new bank’s capital requirements.