Zopa
Zopa is a British digital bank headquartered in London, specializing in online financial services including personal loans, savings accounts, credit cards, and car finance.[1] Founded in 2005 as the United Kingdom's first peer-to-peer lending platform, Zopa pioneered connecting borrowers and lenders directly, bypassing traditional banks to offer competitive rates.[2] In December 2018, it received a restricted banking licence from the Prudential Regulation Authority, followed by a full unrestricted licence in June 2020, enabling it to operate as a fully regulated bank under the Financial Conduct Authority and Prudential Regulation Authority.[3][4] Since its transition from peer-to-peer lending, Zopa has expanded its product offerings, including the fee-free Biscuit current account with cashback rewards and interest, flexible Smart Saver accounts, and innovative credit cards like the Zopa Credit Card.[1] The company emphasizes transparency, customer-centric design, and ethical practices, earning it multiple accolades such as Best Credit Card Provider at the 2025 British Bank Awards and Best Savings App at the 2025 Moneynet Awards.[1] By November 2025, Zopa serves over 1.5 million customers across the UK, with total assets of £6.3 billion as of June 2025,[5] and has pursued growth through acquisitions like Rvvup in 2025 to bolster its retail finance capabilities.[6][7] Recent initiatives include the Jobs 2030 program, aiming to reskill 100,000 banking workers in AI by 2030, reflecting its commitment to innovation in the fintech sector.[1]History
Origins as Peer-to-Peer Lender (2005–2015)
Zopa was founded in March 2005 by Giles Andrews and four other co-founders as the world's first peer-to-peer lending platform, with the goal of disrupting traditional banking by directly connecting individual lenders and borrowers online.[2][8][9] The company emerged from discussions in 2004 among its founders, who sought to create a more efficient alternative to high-street banks by eliminating intermediaries and leveraging technology for matchmaking.[10] Headquartered in London, Zopa initially targeted UK residents, offering a marketplace where lenders could fund personal loans without the overheads of conventional financial institutions.[11] The platform's core model involved matching lenders with creditworthy borrowers for unsecured personal loans, typically ranging from £1,000 to £15,000, used for purposes such as car purchases, debt consolidation, and home improvements.[12][13] Borrowers underwent a proprietary application process, while lenders bid on loan portions at competitive interest rates, with Zopa charging a 1% annual service fee to lenders and an arrangement fee of up to £190 to borrowers. Early interest rates for lenders averaged 5-7%, providing returns higher than traditional savings accounts but lower than bank lending margins, thanks to the direct model.[14] Zopa introduced innovative credit scoring and risk assessment models tailored to peer-to-peer dynamics, drawing on applicant data to categorize risk bands and ensure diversified lending to minimize defaults.[15] In its formative years, Zopa navigated significant challenges, including the 2008 global financial crisis, during which it maintained positive returns for lenders with no capital losses and bad debt rates below 1% after initial adjustments.[16][17] Operating under a consumer credit license from the Financial Services Authority (FSA), Zopa focused on conservative underwriting, which helped it thrive as bank lending tightened.[18] By 2015, the platform had facilitated over £1 billion in total loans, with annual lending volumes reaching £532 million that year, serving hundreds of thousands of users and establishing itself as a fintech pioneer.[19][20][21]Transition to Banking (2016–2021)
In 2016, Zopa achieved a significant milestone by securitizing its first loan portfolio, which received the highest debut rating globally for any peer-to-peer (P2P) securitization at AAA. Later that year, in November, the company applied for a banking license from the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), marking the beginning of its strategic pivot toward becoming a fully regulated bank.[22][23] By early 2017, Zopa had cumulatively lent £2 billion through its P2P platform, facilitating over 300,000 loans to more than 246,000 borrowers since its inception. In May, it received full FCA authorization as a P2P platform, enhancing its regulatory compliance and operational stability. This paved the way for the launch of the Innovative Finance ISA (IFISA) in June, offering investors a tax-efficient wrapper for P2P returns targeting up to 6.1%.[24][25][26] Between 2018 and 2019, Zopa raised £44 million in August 2018 as the first tranche of funding to support its digital bank development, later topping up to £60 million in November. In December 2018, it was granted a restricted banking license by the PRA and FCA, allowing initial testing of banking products under supervision. The company expanded its offerings in 2019 by launching secured car finance, providing transparent hire purchase options to diversify beyond unsecured personal loans.[27][28][29][30] In June 2020, Zopa received its full banking license from the PRA and FCA, enabling it to accept deposits and operate as a fully licensed institution. This led to the launch of Zopa Bank shortly thereafter, introducing fixed-term savings accounts protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per depositor. The transition allowed Zopa to leverage its lending expertise while offering enhanced consumer protections previously unavailable in its P2P model.[3][4] By 2021, Zopa had processed over £6 billion in loans through its P2P platform over 16 years. In December, it closed the P2P lending business, acquiring the outstanding £347 million loan portfolio from retail investors at face value to ensure they received full principal returns. This closure facilitated a complete shift to a direct lending model, where Zopa funds loans from its own balance sheet as a bank, eliminating reliance on external investors. Concurrently, in October, Zopa raised $300 million (£220 million) in equity funding led by SoftBank Vision Fund 2, achieving a $1 billion valuation and unicorn status to fuel banking expansion.[31][32][33][34]Expansion and Recent Milestones (2022–present)
In 2022 and 2023, Zopa significantly expanded its customer base and deposit portfolio as it solidified its position as a digital bank. By early 2023, the company had reached approximately 850,000 customers, supported by over £3 billion in deposits across more than 150,000 savings accounts and £2 billion in outstanding loans.[35][36][37] This growth was bolstered by the acquisition of DivideBuy in February 2023, which integrated buy-now-pay-later (BNPL) capabilities into Zopa's embedded finance offerings, enabling higher credit limits up to £30,000 for point-of-sale financing and marking the company's first major acquisition.[38][39] Zopa achieved its second consecutive year of profitability in 2024, doubling pre-tax profits to £34.2 million from £16.8 million the previous year, driven by a 30.2% increase in total revenue to £303.4 million. The bank's deposit base surged 62.5% to £5.5 billion, while loans on the balance sheet rose 16.2% to £3.1 billion, reflecting robust demand for its savings and lending products. In December 2024, Zopa secured $87 million in equity funding led by A.P. Moller Holding, maintaining a valuation exceeding $1 billion.[40][41][42] Building on this momentum, Zopa launched its "Biscuit" current account in June 2025, offering 2% interest on balances, 2% cashback on household bills up to £30 annually, and access to a linked regular saver account at 7.10% AER on up to £300 monthly deposits, aiming to attract everyday banking users with fee-free features and seamless integration. In September 2025, the company acquired Rvvup, an AI-powered payments platform, to enhance its embedded finance capabilities by unifying checkout experiences for merchants and tripling the size of this business segment within two years. Earlier that year, in May, Zopa raised £80 million in Additional Tier 1 (AT1) capital through its first bond listing on the London Stock Exchange, strengthening its balance sheet for accelerated expansion. The bank set an ambitious target of reaching 5 million users by 2028, focusing on product innovation and market penetration. In August 2025, Zopa initiated the "Jobs 2030" campaign, a five-year initiative to reskill 100,000 UK banking workers in AI disciplines, including through a GenAI Engineering Programme and Zopa Coding Academy, to address sector-wide technological shifts.[43][44][45][46][47][48][49] Overall, Zopa's growth trajectory has seen it lend a cumulative over £13 billion since inception, while managing over £4 billion in customer savings by mid-2024, with deposits surpassing £5 billion later that year.[6] As of November 2025, Zopa serves over 1.5 million customers, with customer savings exceeding £5 billion. The company earned recognition as Best Credit Card Provider at the British Bank Awards 2025, underscoring its product quality and customer satisfaction amid ongoing scaling efforts.[2][50][51][52][53]Products and Services
Banking and Savings Accounts
Zopa offers deposit-taking products through its banking license, focusing on accessible current accounts and savings options designed for everyday financial management. The Biscuit current account, launched in June 2025, serves as the primary everyday banking product, providing a fee-free option for spending and saving with built-in rewards.[54][44] This account earns 2% AER (fixed for the first 12 months) on balances up to £2,000, along with 2% cashback on direct debits totaling up to £1,500 annually, and supports fee-free overseas spending via a contactless Visa debit card.[54][55] It is managed entirely through the Zopa mobile app, with automated onboarding allowing account opening in minutes and instant access to virtual cards for immediate use.[55] Zopa's savings products are centered around the Smart Saver account, which enables users to organize funds into flexible "pots" for different goals, all accessible via the app. This includes easy-access Access pots at 3.25% AER (variable), notice-based Boosted pots offering up to 3.75% AER (variable) with 7-, 31-, or 95-day notice periods, and fixed-term pots locked for 6 months to 5 years at fixed rates up to 4.25% AER.[56][57] Biscuit account holders can also access a Regular Saver pot at a market-leading 7.10% AER (variable) on deposits up to £300 per month, ideal for building savings habits without penalties for early withdrawal on non-fixed options (as of October 2025).[58] All eligible deposits across these products are protected up to £85,000 per person by the Financial Services Compensation Scheme (FSCS), ensuring customer funds' safety in the event of bank failure.[59][60] Key features enhance user accessibility and financial oversight within the banking and savings ecosystem. The Borrowing Power tool, integrated into the app, provides a personalized 1-10 rating of financial health based on credit score, affordability, and spending patterns, offering tailored recommendations to improve eligibility for products without impacting credit files.[61][62] Users can view their credit score directly in the app for ongoing monitoring. Customer support includes in-app live chat with human agents and phone assistance available Monday to Friday from 9am to 6pm and Saturday from 9am to 5:30pm, emphasizing responsive, non-bot interactions.[63][54] By November 2025, Zopa manages over £5 billion in customer savings and serves 1.5 million total customers, with one in four holding multiple products across banking and savings.[6][5]| Savings Product | AER (as of October 2025) | Key Flexibility | Maximum Deposit |
|---|---|---|---|
| Access Pot | 3.25% (variable) | Withdraw anytime | £250,000 |
| Boosted Pot | Up to 3.75% (variable) | 7-95 days notice | £250,000 |
| Fixed-Term Pot | Up to 4.25% (fixed) | Locked 6 months-5 years | £250,000 |
| Regular Saver | 7.10% (variable; Biscuit-linked) | Up to £300/month | £3,600/year |