Julien Eichinger - stock.adobe.c

Zopa Bank hits £1bn deposits in just 18 months

Bank has seen rapid growth since its launch and has set ambitious targets for the next 12 months

Zopa Bank has received £1bn in customer deposits since its launch 18 months ago and has set its sights on reaching £2bn in the next 12 months.

The bank, which models its customer-centric approach on tech forms such as Amazon and Netflix, has also issued more than 200,000 credit cards become a top five credit card issuer in the UK.

The fintech began life in 2005 as one of the first peer-to-peer lending businesses, and saw huge growth, making the company a fintech unicorn in 2021 after reaching a $1bn valuation.

In June 2020, Zopa gained a banking licence in the UK and began to build and run its app-based banking arm alongside its peer-to-peer lending business until last month, when it closed the original business to focus on banking.

In its first 12 months, Zopa Bank concentrated on the savings market, offering an account that can be set up in seven minutes. All its banking services are available on the Zopa app, which was launched in 2018.

A Zopa statement on the £1bn deposit milestone said: “We’re incredibly proud to announce that our customers have trusted us with more than £1bn of their hard-earned savings. This is a testament to our customer-centric approach to innovation that strives to deliver products that tackle real financial needs.

“Over the next 12 months, we plan to double our savings portfolio again to £2bn, launch an easy access product, and continue to innovate at the intersection of embedded finance and lending.”

Zopa Bank was designed to use the latest technology such as machine learning to give customers experiences similar to those when using the likes of Netflix and Amazon.

“With our unique fintech heritage and 16 years of lending experience, we focus on better meeting the financial needs of UK customers in sectors where they have traditionally been poorly served, while also delivering an experience that matches their expectations of a digital-first company,” said the Zopa statement.

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Gareth Lodge, analyst at Celent, said Zopa’s advantages can all be linked to the fact that it has already been around for 15 years. “It has strong brand recognition and existing, happy customers, it has proven, stable technology and also has a lot of insight into the loans process and what clients want,” he said.

Lodge said his understanding is that many of the bank’s deposits are in long-term savings products, which in turn helps it to fund its lending activities. Zopa offers a fixed-rate savings account that can be opened online in as little as seven minutes.

The pandemic could also have had an impact, Lodge added. “I do wonder if the pandemic also helped – a simple, quick process, and with offerings that will consider those with lower credit ratings.”

Zopa decided to build the tech platform for its banking products in-house because of its extensive internal tech talent with experience in building a peer-to-peer lending platform.

In 2018, in preparation for the new bank, Zopa invested in building a team of developers based in London and Barcelona.

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