Zopa shutters P2P retail investment business to focus on banking offering
UK financial services firm Zopa has decided to close its P2P investments division and focus its energies and resources on its nascent banking offering.
Zopa CEO Jaidev Janardana
Writing in a blog post on the company’s website, Zopa CEO Jaidev Janardana says the decision to close its foundational retail investing business is due to an erosion of consumer trust and regulatory burdens.
Janardana says: “We’re extremely proud of our peer-to-peer DNA and are honoured that over 90,000 Investors joined us on this journey over the last 16 years.”
Zopa will sell all retail investor portfolios at full value to Zopa Bank in order to “lock in the interest earned by investors so far and ensure the timely return of their money”.
Janardana says P2P customers will receive their investment balances back by the end of January.
He writes customer trust in P2P investing has been damaged by a small number of businesses whose approach led to material losses for retail investors.
Changes in regulations are also to blame, which raised operational costs and the costs of attracting new investors.
Janardana adds the company has seen strong demand for its Zopa Bank services since its launch in June 2020, including its credit card and savings account products.
