FinTech pioneer gets green light to launch digital bank
Online peer-to-peer lender Zopa has today announced it will be launching a bank after being granted a licence in the UK.
The FinTech company said it will now be the world's first combined P2P lender and digital bank.
Zopa has been granted an initial permit with restrictions from the UK's Financial Conduct Authority (FCA) to open a bank.
The firm's digital bank offering will include a fixed-term savings product, a credit card and a money management app.
"Acquiring our banking licence is the starting point for Zopa to become a major force in retail banking," said CEO Jaidev Janardana.
"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."
Last month, Zopa closed a £60 million funding round after raising an additional £16 million.
The money came from new and existing investors. Although not disclosed, existing investors include Bessemer Venture Partners, Augmentum Capital, Northzone and Wadhawan Global Capital.
"This new funding takes us a step closer to realising our vision of being the best place for money in the UK," Janardana said at the time.
"Having served half a million customers to date, Zopa is set to redefine the finance industry once again through our next generation bank to meet a broader set of UK customers’ financial needs."
Zopa has lent more than £3.7 billion in unsecured personal loans to UK customers since it was founded in 2005.
The Financial Conduct Authority (FCA) warned this year that it plans to limit how much P2P lenders like Zopa can advertise to retail investors as it was "not comfortable that risk and reward are always balanced appropriately" on the platforms.