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Peer2Peer Finance News | July 18, 2019

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BBA would welcome Zopa bank as a member

BBA would welcome Zopa bank as a member
Suzie Neuwirth

ZOPA could become a member of the British Bankers’ Association (BBA) once it receives its licence, the trade body for the country’s banking sector has said.

Last month, the UK’s largest and oldest peer-to-peer lending platform announced that it is applying for authorisation from the City regulators to operate as a digital bank, alongside its existing P2P business. The news was a first for the industry, which usually positions itself as a disruptor to the conventional banking system.

“Any organisation that has a banking licence can be a member,” a BBA spokesperson told Peer-to-Peer Finance News.

Read more: Zopa 2.0 – the UK’s oldest P2P platform gets a rebrand

The spokesperson said that Zopa’s P2P arm would not affect its eligibility for membership, as long as it had full regulatory authorisation to operate as a bank.

“We have 200 members, including challenger banks,” the spokesperson said. “As an organisation we already cover lots of different types of banks.”

If Zopa did join the banking trade body, it would mark an interesting progression in the P2P story. Commentators have speculated that platforms would apply for banking licences, but there has traditionally been a frosty relationship between the banking lobby and P2P.

Zopa’s existing tie-up with Metro Bank throws another interesting quandary into the mix. The partnership was announced over a year ago, whereby the challenger bank lends directly to consumers through Zopa.

Whether Metro Bank would want to lend through a competitor – and indeed, whether Zopa would welcome such a partnership once it has its banking licence – is debatable.

Read more: Zopa’s transparency secures high rating from Fitch

A Metro Bank spokesperson said that the announcement had no “immediate” impact on its relationship with Zopa.  “We welcome all competition in banking, the more choice there is for consumers the more it will drive up competition and standards,” the spokesperson said.

Zopa was contacted for comment.