Zopa, the digital bank, is set to challenge the º£½ÇÊÓƵ's leading lenders with a new high-interest current account.
The London -based fintech has introduced "Biscuit," which it claims will enable customers to earn £256 in cashback and interest annually, as reported by .
The current account provides 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 City AM: "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 emphasised that ensuring "ease and value" for consumers underpinned key operations across Zopa.
The current account will directly compete with the likes of HSBC, Lloyds and Barclays as it signifies 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 giant Revolut has expanded its product line from crypto to holiday booking and phone contracts in the last year.
However, Ferrero stated that the Revolut path was not in their sights.
"I wouldn't expect us to move like Revolut does," she told City AM. "We want to make sure we go deep before we go broad."
Ferrero commented: "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."
However, the fintech sector faces a crowded marketplace in current accounts, with intense competition from both traditional banks and digital challengers.
Despite many fintechs initially showing strong performance in attracting customers away from high street banks, this trend has seen a slowdown.
Monzo, a leading name in fintech, has only achieved a marginal net increase in current account customers since the start of 2024, as per Pay.º£½ÇÊÓƵ figures.
In the first half of 2024, Monzo experienced more customers switching away than joining, but it managed to reverse this trend with a net gain in the following three quarters.
Yet Ferrero expressed her optimism about Zopa's foray into the current account sector, saying she feels "very confident" about the move.
She elaborated on the approach, stating, "I think it goes back to ease and value, think about the stuff you use in your life."
Ferrero also highlighted the importance of consistent offerings, "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."
