Next generation banking starts with the customer 9 October 2017 Jaidev Janardana (CEO)

What do customers want? Fairness Intuitive Experience Security

Customer outcomes don’t match expectations Credit cards - balance transfer 49% of people who took the 0% deal, ended up paying £267 more interest 1 VS 80% of customers don’t understand the features of their balance transfer card 2 3 Sources: 1. uSwitch.com; 2. FCA, Credit card market study, 2016; 3. Zopa

Leading to adversarial relationships Savings rates 66% of savers don’t like that banks advertise a rate and cut it after a year 1 20% of savers with a fixed-term account don’t know what happens to the interest rate at the end of the term 1 2 Rates (less than 2 years) Rates (more than 5 years) Sources: 1. Zopa; 2. FCA, Cash savings market study report, 2015

Customer experience: held back by tech & structure Net Promoter Score -14 -4 13 27 74 Biggest obstacles in banks delivering the best possible customer experience? Outdated tech Siloed systems Lack of a consolidated customer view Lack of clear CX strategy & exec commitment Siloed organisation / conflicting KPIs Lack of data for personalised experience Lack of funding Source: www.NPSBenchmarks.com, company filings Source: Digital Banking Report, Improving the Customer Experience in Banking, 2017

1 out of 3 1 out of 2 All leading to continuing erosion of trust More than 50% of customers don’t have full trust that their money and personal details are safe with their banks 1 don’t trust fingerprint recognition in place of passwords 4 think they are likely to be a victim of bank fraud over the next 5 years 2 1 out of 3 1 out of 2 Sources: 1. EY, Customer trust: without it you’re just another bank, 2016; 2. Populus, Inevitable or preventable?; 3. Which?, 2016; 4. HSBC, Trust in Technology, 2017

Next generation banking starts with the customer A fair business model designed to win when customers win, with simple and transparent products and services based on customers needs, delivering personalised customer experience driven by proprietary technology.

Zopa Bank Customer aligned products… Unsecured Personal Loans No early repayment fees Credit cards No 0% Saving & investments No front book and back book pricing differentiation Prioritising existing customers Auto loans Soft check Transparent pricing …delivered through award winning experience… …embracing open banking to enable customers to get in control of their finances Simplifying finances: Everything in one place, securely and in customers’ control Snappy insights: To act on, whether to avoid charges or work towards a bigger goal Great value: Personalised pricing

What does it take?

Strong credit risk management Strong sector specific expertise Financial engineering Strong credit risk management Advanced analytical skills Prudent risk management Regulatory knowledge

Customer obsession 182 hours Exceptional customer service Zopa customer “This is my second loan from Zopa and I have been so impressed by the staff and how easy you make the whole process” Customer obsession Exceptional customer service Satisfaction surveys 182 hours of usability testing Continuous testing Insight to empower customers Simple & intuitive experience Zopa employee “Zopa is a fantastic place to work, great teamwork, great work ethic, great customer service, putting customers at the heart of what we do”

Multi-disciplinary teams Structure and culture that attracts and nurtures talent Technology Great customer proposition Product Regulation UX Design Finance Data-science Risk Glassdoor Multi-disciplinary teams Ratings out of 5 Source: Zopa engagement survey, Glassdoor

lower operating costs than UK banks for similar products1 Control of the technology stack 99.6% service availability Secure and stable architecture Short release cycles Built in-house for scalability & flexibility Nimble and low-risk development Lean and agile operating model 53% lower operating costs than UK banks for similar products1 Data source all Zopa +3000 software releases Sources: 1. Deloitte Study 1. Source: Deloitte

Customer aligned products delivered through award winning experience Zopa Bank Customer aligned products delivered through award winning experience embracing open banking to enable customers to get in control of their finances

We need to change the narrative 42% have experienced stress or anxiety due to financial difficulties 1 only 20% believe their primary financial services provider will provide unbiased advice 3 4 / 10 adults are not in control of their finances 2 36% of the UK population cannot calculate the impact of a 2% interest rate on £100 in savings  22% of adults can’t read a bank statement, and 43% aren’t comfortable managing money https://www.aviva.co.uk/investments/save-smarter/article/alleviating-financial-stress/ 1 in 5 adults cannot read a bank statement 2 Sources: 1. Equifax, 2016; 2. Financial Capability Board and Money Advice Service, 2015; 3. EY, The Relevance Challenge What retail banks must do to remain in the game, 2016