Peer-to-peer lending platform Zopa has received its full banking licence and will look to launch a new set of products, beginning with a fixed-term savings account.
Zopa Bank will focus on the financial needs of UK customers which have been poorly served. Its first product is the Zopa Fixed Term Savings Account, which will offer competitive rates over one-five years, it claims.
Accounts can be opened online within seven minutes and are protected by the Financial Services Compensation Scheme by up to £85,000.
Furthermore, the bank will release a credit card in the coming months, which will help consumers have more control over their borrowing.
This new service will sit alongside Zopa’s existing personal and auto loans products and its investment offerings.
The coronavirus pandemic has raised more questions on whether traditional financial institutions can help with consumers needs, Zopa said. In research conducted by the bank, it found that 20% of UK adults had struggled to contact their bank during the coronavirus. Furthermore, 30% said they wanted more flexibility and better guidance from their main banks.
Zopa CEO Jaidev Janardana said, “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.
“Securing our banking licence enables Zopa to play a wider role in the financial lives of our customers, as well as offering much needed choice and competition to the wider market.
“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.”
Last year, Zopa collected $140m in a funding round from IAG Silverstripe to support its pursuit of a banking license.
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