Three lessons borrowed from Zopa

zopa

22 Sep Three lessons borrowed from Zopa

Learning from those who have gone before us – other organisations and other sectors – is integral to the ‘test and learn’ culture that we’re adopting on the Futurewave project.

In an earlier post, we shared insights from Airbnb and here we take a look at another collaborative consumption business, Zopa, the world’s oldest peer-to-peer (P2P) loan company.

When the business launched back in 2005, it disrupted the personal finance industry by putting customers in full, bespoke control of their money and cutting out traditional banks.

For borrowers, Zopa opened up access to P2P lenders, often at better interest rates, while savers could use the platform to lend directly to borrowers and get a better return on their investments.

Ten years on from launch and Zopa has become the UK’s largest P2P lender – reaching £1 billion of loans earlier this year, doubling 2014 revenues to £11.5m and forecasting profitability in 2017.

Here are three lessons we can borrow from Zopa as we continue on our own innovation journey:

  1. Trust is a must. As with Airbnb and all other services in the sharing economy, success is underpinned by trust. And for businesses operating on the financial services side of the sharing economy who are entrusted with the public’s money, nowhere are issues of trust more significant. Central to Zopa’s success has been the platform’s ability to build trust among lenders so that they are comfortable with the concept of lending their money to strangers.
  2. What’s in it for me? In the early days when you have created an exciting new service for customers it is very tempting to tell everyone about this ‘clever tool’ you’ve made, however, Zopa’s breakthrough came when they switched from talking about the ‘clever tool’ to only talking about the great rates they were able to offer customers. Futurewave must take note of this difference between explaining what we are creating, and communicating the benefits to our users.
  3. Competitive advantage. With a stack of awards behind it, including Most Trusted Loan Provider 2015, Zopa’s service offering is so good that the business is now competing against the banks, rather than other peer-to-peer lenders. This demonstrates just how much of an impact Zopa has had on the financial services market in a relatively short space of time and is a real example for Futurewave to aspire to.
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