Fintech lender Zopa has been granted a full banking licence and plans to launch its first merchandise later this yr.
Zopa stated on Wednesday it had been granted a full licence by the Monetary Conduct Authority, which lifted restrictions it positioned on Zopa when it first gained a provisional licence in 2018. The corporate was restricted to accepting simply £50,000 from clients to check its mounted time period financial savings product.
The lifting of restrictions means Zopa is now free to launch Zopa Bank to the broader public later this yr. The corporate plans to launch a hard and fast time period financial savings account and a bank card within the coming months.
“Now more than ever the banking industry needs innovative, agile providers who work on behalf of customers,” Jaidev Janardana, Zopa’s chief government, stated in a press release.
“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.”
Zopa is among the UK’s oldest fintech companies. The peer-to-peer lending enterprise was based in 2005. Its platform connects buyers with client debtors, providing extra engaging charges than different mainstream investments. Over £1bn ($1.3bn) is lent on Zopa’s platform annually and has facilitated loans worth £5bn to this point.
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Zopa has raised £200m from buyers to this point, together with a £140m fundraise in December 2018 that was essential for Zopa to safe its banking licence. The fundraising noticed IAG Capital take a majority stake in Zopa and the change of possession required approval from the regulator, which was granted in December 2019.
Zopa enters a aggressive banking market within the UK, with well-funded digital-only rivals equivalent to Monzo and Starling, extra conventional challengers equivalent to Metro Bank (MTRO.L) and Santander (SAN.MC), and the normal “Big Four” lenders HSBC (HSBA.L), Barclays (BARC.L), Lloyds (LLOY.L), and RBS (RBS.L).
“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,” Janardana stated.