Peer-to-peer lending platform Zopa has announced plans to become a digital bank with the launch of a trial of a fixed-term savings account.

The digital funding platform, which was the first peer-to-peer (P2P) lender when it launched in 2005, said the Fixed Term Saver Product - currently in beta stage with existing customers - marks a significant step on the company’s journey to becoming a fully-fledged challenger bank.

The company will launch the savings account under its restricted banking licence which allows Zopa to accept up to a limit of £50,000 in customer deposits.

The P2P lending market is battling falling demand from investors, as well as greater regulatory hurdles, which have seen many large platforms look to direct to consumer and business banking services as a route to profitability.

Announcing its move into digital banking services in December last year, the company said that under the conditions of its banking licence, it will be granted a full licence once it meets the conditions set by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the mobilisation phase.

Zopa said that once fully rolled out, the new account will be one of a range of digital banking services which will be built using proprietary technology.

Initially around 200 customers are being invited to open a Fixed Term Saver account, with the test term of one month, and a four per cent interest rate, which enables testers to deposit up to £100 into the beta account. It will also be afforded Financial Services Compensation Scheme protection.

Didier Baclin, chief product officer at Zopa, said: “Inviting existing customers to test our Fixed Term Saver is a major milestone in our bank journey – it is a great opportunity to ensure that the product meets their expectations before the full launch next year so that we deliver a great product that customers can trust.”

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