Challenger financial services firm Metro Bank is offering loans through peer-to-peer lending platform Zopa.
The agreement sees two of the biggest competitive threats to traditional banks co-operate and reveals an insight into retail banking of the future.
New finance firms that focus on particular products rather than a full service are not always in competition, so collaborating and sharing customers is not damaging to business.
Metro Bank, which was the first new high street bank in more than 100 years when it launched in 2010, is lending money to customers through Zopa's peer-to-peer lending platform.
“We are continually looking to work with partners that can benefit our customers and Zopa are the perfect players in the peer-to-peer space to help us lend funds to consumers," said Metro Bank CEO Craig Donaldson.
Read more about alternative finance firms
- Peer-to-peer lending accounted for more than £1.2bn of UK loans in 2014, with confidence growing among businesses and individuals in IT-enabled access to credit
- Cloud-based UK peer-to-peer lending platform MarketInvoice is moving to a Microsoft Azure-based platform as a service (PaaS) to cope with demand
“The partnership we have with Zopa is a cultural fit that works perfectly with our commitment to providing a convenient and customer-focused banking experience, and we look forward to working with them closely,” he added.
In the future, rather than buying financial products from full-service banks, consumers are likely to shop around online. Because new finance firms are focusing on certain products, they can differentiate in this area and customers can use different providers for different products.
According to University of Cambridge research, financial transactions through online lending platforms in Europe look set to become mainstream, with the predicted total for 2015 at €7bn.
The research revealed that transactions through the platforms reached €3bn in 2014, with the UK accounting for three-quarters (€2.34bn) of the total.