Zopa: Fintech bank takes on HSBC and Lloyds with current account
Digital bank Zopa is parking its tanks on the lawns of the UK’s top lenders – with a new high interest current account.
The London-based fintech has launched “Biscuit,” which it said will allow customers to make £256 in cashback and interest per year.
The current account offers two per cent AER interest on balances, two per cent cashback on bills, and up to 7.10 per cent AER on savings via a Regular Saver pot.
Merve Ferrero, chief strategy officer at Zopa Bank, told Morning Wire: “What we have tried to do is build a product that leverages the technology of a neobank but gives the value no one else does.”
Ferrero said ensuring “ease and value” for consumer underpinned key operations across Zopa.
The current account will serve as a direct competitor to the likes of HSBC, Lloyds and Barclays as it marks the London-based fintech’s entry into everyday banking.
Previously the firm’s range of financial products and services included savings accounts, personal loans and credit cards.
Neobanks drive diversification
Zopa joins many of its digital banking peers in expanding operations and diversifying their product range.
Most notably, fintech juggernaut Revolut has stretched its product line from crypto to holiday booking and phone contracts in the last year.
But Ferrero said the Revolut path was not in their sights.
“I wouldn’t expect us to move like Revolut does,” she told Morning Wire. “We want to make sure we go deep before we go broad.”
Ferrero said: “They’re approaching it more from let’s become the super app, whereas our strategy is to capture all the financial needs of the customer.”
But the fintech enters a crowded market in current accounts with heated competition between both legacy lenders and neobanks.
Whilst many fintechs maintained strong consistency in stealing customers from their high street counterparts, the momentum has since stalled.
Fintech veteran Monzo has only scraped a net gain of current account customers since the beginning of 2024, according to Pay.UK data.
In the first two quarters of 2024, the firm bled more current account switchers than it gained, but managed to squeeze a net gain in the three quarters following.
But Ferrero said she feels “very confident” in Zopa’s landmark step into the current account market.
“I think it goes back to ease and value, think about the stuff you use in your life” she explained.
“I do think that small promotions and customer delight features are important, but they’re not enough. You need to offer them on a consistent basis so you don’t surprise the customers; that’s when you start earning the trust”.