Zopa Bank will make its current account widely available by the end of this year, signalling a major milestone in the company’s journey from peer-to-peer (P2P) lending to banking.
Beginning life as a P2P lender in 2005, Zopa launched its app-basedbank 15 years later, originally alongside its lending business, before it shuttered that operation a year later.
The general availability of its current account, which is already used by 60,000 existing Zopa customers in its beta version, is further evidence of the company’s flexibility and ability to harness its tech to adapt to the market.
Zopa Bank CEO Jaidev Janardana told Computer Weekly the beta label will be removed from the current account in the final quarter of this year after a successful pilot with customers already using its other products.
“We wanted to make sure that we got good customer feedback on the day-to-day product and make sure the systems work and can scale,” he said.
Banking journey
It was 2016 when Zopa first announced its plan to become a bank, due to what it described as a loss of trust in the fintech segment and increasing costs.
By December 2018, it had gained a UK banking licence with restrictions and, after receiving a full licence, it launched in 2020 with its first product – a savings account that could be set up in seven minutes.
It now offers personal loans, car financing, credit cards and buy-now-pay-later (BNPL) products, as well as a variety of savings products.
Zopa Bank now has 1.4 million customers and revenue of just over £300m, which grew about 30% last year. Its profit doubled to just under £35m during the same period, and it currently holds over £5bn in deposits.
Janardana said the existing products alone could give the company a similar “growth trajectory” as last year, but the current account will enable it to do more with its customers.
“We want to do more with our customers, very specifically day-to-day banking,” he said. Zopa’s beta version current account has been available to existing customers since September 2024.
“We have typically built a lot of our technology, and that should be the case with the current account as well. The architecture is services-oriented, which means there are a lot of things that we have built for our existing products that can be reused”
Jaidev Janardana, Zopa Bank
Also, in the final months of this year, depending on regulatory approval, Zopa Bank plans to offer investment products, said Janardana.
The bank has about 850 staff, mainly based in London, a third of whom are technologists, including engineers and data scientists. It is the company’s tech expertise and adaptability that have enabled it to quickly build a current account offering.
“We have typically built a lot of our technology, and that should be the case with the current account as well,” said Janardana. “The architecture is services-oriented, which means there are a lot of things that we have built for our existing products that can be reused. For example, we have a credit card business, which means the debit card works.”
The company does, however, use third-party technology from fintech unicorn Thought Machine for its current account ledger.
“Our goal is to create a current account that is as easy to use as any of the new banks,” said Janardana.
AI at its core
New banks like Zopa, which are tech-driven, hold an advantage in adopting the latest tech. Generative AI, which is currently being adopted rapidly in the finance sector, is no exception.
Zopa built its business on predictive artificial intelligence (AI) and is now testing the generative variety.
Our goal is to create a current account that is as easy to use as any of the new banks
Jaidev Janardana, Zopa Bank
“All our value propositions are built on AI, predictive not generative (GenAI). It is part of the reason why customers choose us as we give instantaneous decisions,” said Janardana.
He said the company is now “experimenting with GenAI” and expects beta products before the year is out.
“Our expectation is that [AI] will change how customers interact with banks. Just like how you can see in the way people surf the internet, those who would typically use Google are now using things like ChatGPT,” he added.
“We expect, by the end of this year, to have [GenAI] beta products for customers from an assistance standpoint, to help them understand their finances better and so on.”
Zopa will use a variety of the foundational models for these services rather than create its own, added Janardana.
The current account comes at a time when challenger finance firms are beginning to make inroads into the market domination of traditional banks. A current account is a means of building a wider relationship with customers, who have tended to regard challenger banks as a secondary finance provider.
Janardana said now is just the beginning for challenger banks. “While challenger firms are profitable and growing, we are merely in the early stages from a market share perspective, with [traditional] incumbents holding the majority. There is momentum and scale, and I expect companies that are successful to be able to continue to maintain more than double-digit growth rates for the foreseeable future.”
