British P2P lender Zopa has just launched a new digital bank after being granted a full UK banking licence.
This was awaited since December last year, when Zopa confirmed a £140 million fundraise, enabling it to meet regulatory capital requirements for its advancement into banking.
Zopa Bank aims to offer various new products and services, with a fixed-term savings account, which can be opened virtually within seven minutes among others. This savings account is expected to offer competitive interest rates to account holders for deposits over one to five years.
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This account is going to be insured up to £85,000 ($106,186) by the UK’s statutory deposit insurance scheme Financial Services Compensation Scheme (FSCS). Zopa will also unveil a credit card with certain new features in the upcoming months. The company claims that the cardholders will be able to manage their borrowings.
Jaidev Janardana, Zopa CEO, comments: “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.”
“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.”
As Zopa becomes a licenced bank, it is likely going to take similar steps as Capital One, where Janardana as well as Zopa’s chief financial officer and chief risk officer once worked. “Capital One was one of the earlier disrupters,” Janardana said. “It’s been a good school for people.”
The company will target younger borrowers with digital features that are common with debit cards but remain rare in the credit card market, the FT reported.
