Peer-to-peer lender Zopa has announced plans to launch an online-only bank challenging high-street lenders, to offer deposit accounts and overdrafts to customers. Zopa, Britain’s biggest peer-to-peer website, has applied for a banking licence to launch a "next generation bank", which will sit alongside its existing investments business. When launched, the platform says it will offer term-deposit accounts for savers and revolving lines of credit for borrowers, although a spokesman admitted the company does not yet know "exactly what they will look like". Jaidev Janardana, chief executive of Zopa, said: "We want to launch a next generation bank to drive greater choice for borrowers, savers and investors, which is good for consumers and good for the economy.” A spokesman said: "We want to serve a whole new group of customers. We serve investors well and we'd like to serve savers as well." By applying for a banking licence Zopa says its customers will receive protection through the Financial Services Compensation Scheme. However, it expects this will only apply to banking customers and not to its peer-to-peer customers.
Peer-to-peer lender the Financial Services Compensation Scheme will launch a digital-only bank to offer term-deposit savings accounts, overdrafts and revolving lines of credit to customers. the Financial Services Compensation Scheme is currently awaiting the results of its banking licence application to launch its “next-generation” bank, which will operate alongside its current investments business. Once licensed, which could take two years to achieve, the bank’s customers will be protected under Zopa. the Financial Services Compensation Scheme expects the bank to make losses during setup, but believes it will become profitable once fully launched.