British peer to peer lender, Zopa has been awarded a UK banking license. Since launching in 2005, the company has facilitated more than £3.7 billion of P2P loans. What's going on: Zopa closed an investment tranche of £44 million (as part of a £60 million round) in August of 2018. This coincided with reaching full-year profitability on its P2P business for the first time. The company has been signaling its intention to create a bank. Zopa's strategy: Zopa’s aim is to "create a set of products that customers can feel good about, with no catches on rates or charges, no hassle to use or understand and which cater to the needs of new and existing customers in a fast-changing market." That makes banking a prime target for a new product. Why would Zopa want to get in on banking?: The challenger bank space is definitely heating up in Europe. Zopa will join Monzo, Starling, Tandem all competing for the UK customer. N26, a challenger bank started in Germany, has committed to an international expansion, setting its sites firmly on the US for a launch in 2019. The digital challenger banks sport a similar value proposition: a slick, user-friendly app, low or no fees, and an intention to act as a central hub for their users' entire financial lives. Zopa, for its part, has a large userbase of lenders and borrowers to serve as its early customers.