With the UK voting to leave the EU, we’d like to share our thoughts on what we believe this means for our customers.
Zopa is a UK-based company and focussed on UK customers, thus we do not expect any direct and immediate impact on the business. However, we expect the economic environment to be uncertain over the coming months. In periods of uncertainty, we prefer to be cautious. As a result, we have tightened our underwriting standards.
Our industry leading credit risk team have been prepared for a Brexit scenario and will make any further updates as necessary. Specifically, we will continue to monitor key trends such as unemployment rates and inflation that we believe impact our customers’ ability to repay. Our analytical capability and agile technology mean that we will be able to identify and react to any adversity extremely quickly.
It is important to note that Zopa has always focussed on lending to customers with stable incomes and very high propensity of repayment. This is reflected in our credit risk performance in the past 11 years and in particular during the economic downturn in 2008. This history also means that we have data on how our customers change their behaviour through economic turbulence. Our underwriting and credit policy has always aimed to generate positive returns for lenders through similar turbulence.
We have built our business to help responsible consumers improve their financial position, be that through earning high returns on their investments or reducing their debt obligations. We have confidence that our customers will successfully navigate this period of change, and this outcome doesn’t impact our commitment to serve them.
We will keep you updated with any more developments once we have more news to share.
Jaidev