Case Study: Helping Zoopa become a Licensed Bank
Company Overview:
Zoopa* was founded in 2010 as a global peer-to-peer (P2P) online lending platform with headquarters in London, England. The company focused on customised relationship banking for SMEs with ten or more employees.
The Role of X Consultancy Company:
Zoopa needed our corporate finance expertise to build a financial model that helped ensure the fintech met the liquidity and regulatory reporting standards required by the PRA before applying for the banking licence.
We worked with Zoopa for one year on the project of helping the fintech transition from operating as a P2P lending to becoming a fully licenced digital bank in the UK. We provided Zoopa with corporate finance expertise and the tools to improve the KPIs that helped it reach its strategic objectives.
Project
Overview:
The project involved working with Zoopa, its hired auditors, and regulatory advisors to identify the gaps between the strategic objectives and the state of its liquidity and regulatory reporting. One of the strategic objectives included obtaining a UK banking licence, yet Zoopa did not qualify for it in 2023 when its executives decided to include it in its business plan.
The pain points of Zoopa:
As a P2P lending platform, Zoopa was affected by the COVID-19 pandemic since the share of overdue loans and average overdue days spiked in 2020. Three years later, the volatility of the financial markets coupled with the prolonged effects of the COVID-19 risk, the liquidity of the P2P lending market was affected.
Loan portfolio and overdue loans issued by Zoopa (January 2019 – June 2020)
How our consultancy company supported this project:
We built a tool for Zoopa, which included KPIs for liquidity and regulatory reporting, namely the liquidity coverage ratio (LCR) and the timeliness, quality, and completeness of financial reporting.
Provided financial leadership to develop, execute, and supervise a business and financial planning process with the Board’s approval:
-
Collected and addressed input from relevant stakeholders in the organisation.
-
Coordinated with the CEO and CFO to ensure plans aligned with the suggested approach.
-
Submitted the Regulatory Business Plan to the PRA based on its requirements.
-
Compiled comprehensive financial statements on time and of high quality.
The Results:
In 2024, Zoopa got its full banking licence, and later that year, it closed its P2P business, focusing exclusively on challenger bank activity. Zoopa's banking offering now includes fixed-term savings (covered by FSCS), credit card accounts, unsecured personal loans, and secured auto loans.
"The financial strategy developed by X Consultancy enabled us to become a fully licensed bank and migrate from an inefficient business model to one that competes with established digital banks.
X Consultancy had a pivotal role in the plan's creation since it displayed excellent financial modelling skills. The project provided us with a robust financial model of high precision." (Zoopa CFO)
In Q3 2024, Zoopa reached a revenue growth rate of 18,53%, allowing it to compete with the top 3 fastest UK challenger banks.
Top 5 fastest growing challenger banks UK, Q3 2024
* Note: All company names and figures are hypothetical and for illustrative purposes only.