Jamie Dimon: Fintech poses ‘big time’ threat to JPMorgan and major banks

Silicon Valley’s technology prowess poses a major competition threat to Wall Street, JPMorgan boss Jamie Dimon has said.

The US investment bank’s chairman and chief executive wrote in his annual letter to shareholders that banks are now facing an attack “from multiple vectors”, as fintech firms and big tech companies size up the sector.

“As the importance of cloud, AI [artificial intelligence] and digital platforms grows, this competition will become even more formidable,” Dimon wrote on 7 April. “As a result, banks are playing an increasingly smaller role in the financial system.”

Dimon said “fintech and big tech are here… big time” and made reference to companies such as Google, Amazon and Walmart, the latter of which recently entered the ring with plans to create a fintech startup of its own.

READHere’s how Wall Street banks are hiring for the blockchain revolution

“While I am still confident that JPMorgan Chase can grow and earn a good return for its shareholders, the competition will be intense, and we must get faster and be more creative,” he added.

The JPMorgan chief said neobanks and non-banks were increasingly taking up market share while facing less stringent regulations, describing their ascent as a risk that “needs to be assiduously monitored”.

He noted fintech’s use of merging social media and data to integrate with other platforms at speed, as well as advances in AI, cloud technology and machine learning.

Dimon said JPMorgan intends to be “a little more aggressive” in pursuing these technologies for itself, adding: “Acquisitions are in our future, and fintech is an area where some of that cash could be put to work.”

JPMorgan’s own previous attempt at launching a smartphone banking app, Finn by Chase, was shut down in 2019. The bank said at the time that it was opting to entice millennial customers to its Chase brand, rather than build a new brand from scratch.

The investment bank continues to make advances in other areas of innovation, most recently in the domain of cryptocurrencies. The bank launched Onyx, a blockchain and crypto development unit, last year.

READJPMorgan’s venturing into outer space to test its blockchain tech

Rivals are hot on its heels, as Goldman Sachs relaunched its cryptocurrency trading desk last month. Citigroup, Morgan Stanley and BNY Mellon have also made similar moves in the space.

“As tough as the competition will be, JPMorgan Chase is well-positioned for the challenge,” Dimon said. “But our eyes are wide open as the landscape changes rapidly and dramatically.”

To contact the author of this story with feedback or news, email Emily Nicolle

Most Related Links :
usnewsmail Governmental News Finance News

Source link

Back to top button