Jaidev Janardana, CEO of Zopa

Jaidev Janardana, CEO of Zopa

The “world’s first” peer-to-peer lender Zopa plans to launch a new digital-only bank in the UK.

The application for a banking licence will be made to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The firm says the regulatory application process should take about 15-24 months.

Jaidev Janardana, CEO of Zopa, says it is “responding to the positive regulatory environment” in the UK and wants to “bring yet more choice to the market”.

At launch, Zopa says its bank will extend the company’s existing suite of investor and borrower products by offering Financial Services Compensation Scheme (FSCS) protected deposit accounts to savers and overdraft alternatives to borrowers.

Janardana says existing Zopa customers will get the “first opportunity to try out our new products” and it “will also actively welcome their input as we shape them”.

Zopa has 187 staff in its London office. Since its launch in 2005 it has lent over £1.8 billion. Over the last 12 months it has lent over £650 million, and currently has over 63,000 lenders.

There are many new entrants trying to muscle into the UK banking sector. Banking Technology has put together a comprehensive list of the known challengers to date and the technology they are using.