Lender Zopa gets licence to launch challenger bank

PEER-TO-PEER lender Zopa has received a banking licence from the City watchdog as it aims to compete with high-street stalwarts.

Chief executive Jaidev Janardana said the banking licence was the starting point for Zopa to become a “major force in retail banking”.

Zopa, which was created 13 years ago, said that it has been awarded a banking licence with restrictions from the Financial Conduct Authority and it will be granted a full licence once it meets certain conditions set by the regulator.

The company will create a new bank and will start to roll out new products next year, including a fixedterm savings product, its own credit card and a money management app.

The new bank will sit alongside Zopa’s existing peer-to-peer lending business.

Mr Janardana said: “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 company joins a number of other banks that are challenging traditional high-street lenders for a share of the retail banking market, such as mobile-only firms Monzo, Starling and Atom.

Zopa applied for the banking licence in 2016 and recently raised £44m to fund its expansion plans.

Zopa has approved nearly £4bn in personal loans as a peer-to-peer lender and has 500,000 loan and investment customers.

The company operates from offices in London and Barcelona, employing 450 people.