JPMorgan Chase

JPMorgan enters UK’s highly competitive digital banking market


US banking giant JPMorgan’s digital bank, Chase, has set foot in the UK, an increasingly crowded retail banking market. JPMorgan’s arrival in the U.K. marks the first international expansion of its consumer bank brand in its 222-year history, according to CNBC.

The digital bank is headquartered at Canary Wharf, London,  but rather than establishing physical branches, JPMorgan will only offer its services through a mobile app and its customers will be served by a purpose-built customer contact centre in Edinburgh. The business has already created 400 jobs in the U.K., and has more hires planned as it grows. A U.K. based subsidiary of JPMorgan Chase is licensed to operate the business. Its activities are regulated by both the Prudential Regulation Authority and the Financial Conduct Authority.

“We are bringing Chase to the U.K. because we want to provide customers with a new banking choice – one that will enable them to benefit from a simple and exceptional banking experience, built on the significant capabilities of JPMorgan Chase,” Gordon Smith, CEO of Consumer & Community Banking and co-President of JPMorgan Chase said earlier this year when the the bank first unveiled its plans to launch Chase in the U.K.  “The U.K. has a vibrant and highly competitive consumer banking marketplace, which is why we’ve designed the bank from scratch to specifically meet the needs of customers here” he added.

Chase intends to offer a range of products, starting with checking accounts along with
rewards such as 1% cashback on debit transactions. It also plans new current account features, savings and investment accounts, loans and mortgages further down the line, utilizing 10x’s platform and regulatory authorization provided by JPMorgan’s UK-based subsidiary.

10x Future CEO Antony Jenkins 
(10x Future CEO Antony Jenkins)

London-based fintech 10x Future Technologies which former Barclays chief Antony Jenkins  founded in 2016, provides bank clients in and outside the UK with a cloud-native core banking platform.
Over the past two years, 10x and Chase have worked together to build a digital banking platform capable of delivering a seamless customer experience and differentiated product features.

In the UK’s already crowded market, the American newcomer faces fierce competition from 344 banks and fintech firms such as Monzo, Starling Bank and U.K.’s most valuable tech start-up Revolut.

But under CEO Jamie Dimon, JPMorgan has sought to combat the threat of fintech stars through a number of acquisitions. In June, the US lender agreed to acquire UK-based robo-advisor  Nutmeg.

Brits have been quick to embrace fintech and traditional banks like JP Morgan Chase have deep pockets (assets of $3.4 trillion) to can enter the digital challenger sector with a long-term plan.

“We will spend hundreds of millions before we get to break-even and get to a place where this is a sustainable business, and we’re not in a rush,” Sanoke Viswanathan, CEO of JPMorgan’s international consumer division,  told the Financial Times.

Others welcomed the announcement, while others are more skeptical as countless digital projects have failed to create a sustainable business impact.

“What did surprise me is that Chase has to spend hundreds of millions and hiring hundreds of people, which sounds like the opposite of a modern technology and fintech,” entrepreneur Matthias Kroener, who set up early digital bank Fidor told Computer Weekly.

City A.M wrote that Chase has the potential to fill the void much fintech has lacked: institutional backing.

“Now is the time for banks to fulfil their unwritten social contract with customers to protect their financial wellbeing. People don’t just want a slick user interface; they want support to plan for the future, save for retirement, avoid late fees and get the best deals” the London-based daily wrote.

Well said.