P2P lender Zopa obtains UK’s first banking license

UK peer-to-peer lender Zopa announced that it had obtained a UK banking license, with restrictions, from the Financial Conduct Authority (FCA).

Launched in 2005, Zopa is considered one of the world’s leading peer-to-peer (P2P) lenders. Its digital banking offering will include a term savings product, credit card, and money management app.

While the company’s banking license is now in a “mobilization” phase, Zopa said she will be granted a full banking license after fulfilling the conditions set by the FCA.

“The acquisition of our banking license is the starting point for Zopa to become a major force in retail banking,” Jaidev Janardana, CEO of Zopa, said in a statement, according to CNBC.

The company has revealed that it has loaned nearly £ 4bn to UK consumers since its inception, including £ 1bn in the past 12 months alone.

In July, it was reported that the FCA was taking a closer look at P2P lenders, including to propose stricter regulations for the industry as a whole.

“We believe loan-based crowdfunding can play a valuable role in financing small businesses and individuals, but it is essential that regulations remain up to date as markets develop,” said Christopher Woolard, Executive Director of Strategy and Competition at FCA. “The changes we are proposing are aimed at ensuring sustainable market development and appropriate consumer protection. “

In fact, Zopa CEO Jaidev Janardana sees a regulatory structure as a step in the right direction.

“We also strongly believe in a well-regulated industry – we have lobbied for years for effective regulation,” Janardana noted in a statement issued at the time. “The more we can do to ensure that all P2P organizations have these standards, the better in our opinion.”

Zopa banking announcement comes as P2P industry heats up in UK Fundraising circle, the UK’s largest small and medium-sized business lending market, has loaned $ 4 billion and is heading for an IPO by the end of the year. And Goldman Sachs launched its consumer bank Marcus in the UK in August, attracting customers with the highest interest rate in the country. In November, it was reported that British banks were seeing an increase in the number of customers switching to Marcus.

“Yes, we are worried about Marcus, we have seen significant exits from our savings products – although I wonder if they can continue to grow at this speed,” said a senior executive at one of the more major UK lenders.

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