Peer-to-peer lending pioneer Zopa has launched a new car finance operation in the UK as it seeks to expand its share of the market.
Zopa has been providing auto finance as part of its personal loans service since the business launched the first peer-to-peer company in 2005, but following its approval for a banking licence last year, it has developed a specialist auto finance arm that will target brokers, dealers and comparison sites for growth.
The new finance offer is headed up by Nick Ielpo (pictured), head of car finance at Zopa. He manages a team of 16 people who oversee every aspect of the auto finance proposition, from product development to partner relations and technology.
It will offer car finance through intermediaries, dealer groups and also as a direct offer, with a focus on providing an omnichannel experience, allowing customers to easily switch from online to showroom during their journey.
He said: “Our vision is to offer finance products to customers using whatever channel they choose and enable them to transition seamlessly between the dealer showroom and their devices. We have started conversations with dealer groups including franchises, independents and emerging online dealerships.
“We started this operation by approaching various auto finance brokers with a more tech-savvy approach, through our existing contacts in the industry. We are currently live with eight brokers; our broker business has been very successful and we now think there’s a great opportunity to extend it to dealers.”
The company has developed its own innovative technology which can assess an applicant’s eligibility for finance within eight seconds and then offer personalised services and solutions.
Zopa’s pre-approval business model is crucial as Ielpo stresses that “customers want certainty – and a good car buying experience”.
Ielpo is keen to work with like-minded companies that are putting the customer at the heart of the buying process.
He said: “At the present time, the market seems to be focused on serving the dealers, and we wanted to put the customer back at the centre of the industry.
“I am confident that we can bring technological change to the industry, and are committed to listening to the consumer that hasn’t been listened to traditionally.”
Zopa’s current car finance product is hire purchase but there are plans to launch a personal contract purchase (PCP) offering in the future.
“When explained well to a customer, PCP can be a great product,” Ielpo said. “There’s certainly a reason why it has seen such a significant uptake. We’d like to launch a product in this space, but we want to do so when we’re ready; before we launch the product we want to feel confident that we can provide the necessary information for our customers so that they fully comprehend what they’re getting into.”
He is also looking to introduce greater levels of automation and machine learning to speed up customer service and reduce costs.
Ielpo added: “I haven’t seen a solution out there that makes the most of the digital experience and emphasises the importance of certainty for customers. What we’re doing is adding the customisation that customers want with the standards they quite rightly expect in 2019.”
Ielpo, who has an engineering and economics degree from Oxford University together with a background in personal lending, began his career with the company in 2015 as a customer NPV manager and advanced to a team leadership role, where he oversaw 15 people tasked with increasing borrower conversion on existing channels.
Zopa stands for Zone of Possible Agreement, the mutual point at which a buyer and seller can reach a deal, which reflects the website’s role in automatically matching investors with borrowers at mutually beneficial interest rates.
Since 2005, it has lent more than £4 billion to half a million borrowers and generated £250 million interest for investors.
Earlier this year, James Alexander, co-founder of the disruptive finance company, who is now a director of think tank and advisory service FutureAgenda.org, told leasing leaders to challenge the status quo and actively search for new business ideas as they define the future of finance.
Speaking at the inaugural Leasing Foundation Innovation Initiative breakfast debate, he said that perspective is critical: “If you stand in the present and look forward, you can just see barriers and obstacles; if you stand in the future and look back, it becomes apparent what has to change.”