Financial Services

JPMorgan launching digital retail bank in UK, looking overseas for growth


Sign for J.P. Morgan on 7th March 2020 in London, United Kingdom. JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York.

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JPMorgan Chase is taking a page from the digital disruptors.

The biggest U.S. bank by assets said Wednesday it is planning to expand its retail presence to the U.K. for the first time — but instead of traditional brick-and-mortar branches, it is offering services only via mobile app.

JPMorgan said its first product, which is being tested internally ahead of its release later this year, will be a checking account. It will be followed by a “range of products” likely to include credit cards and home loans, according to a person with knowledge of the plans.

The project will provide a case study into whether JPMorgan can expand its retail bank in other countries around the world, according to this person, who spoke on condition of anonymity because aspects of the project weren’t announced.

In the U.S., JPMorgan and other big lenders are limited by federal rules prohibiting them from acquiring other banks after gaining 10% of the country’s deposits. The project could also ultimately inform how JPMorgan manages its network of 4,908 retail branches in the U.S., the person said.

“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,” JPMorgan retail banking chief Gordon Smith said in the announcement.

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“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.”

In recent years, reports that JPMorgan was working on a secretive project in the U.K. emerged after the bank listed job openings there for technical positions. In 2019, TechCrunch reported that the bank was in the early stages of creating a retail digital bank in Britain after shuttering a similar offering in the U.S. called Finn. Bloomberg first reported on the official rollout of the U.K. product.

The announcement comes after news that Chairman and CEO Jamie Dimon has admonished his management team about the rise of fintech competitors. Square and PayPal have surged in market capitalization in recent years, fueled in part by the viral success of digital wallets that are increasingly becoming full service mobile bank accounts.

The U.K., home to almost 70 million people, has been the birthplace for several so-called challenger banks, start-ups including Revolut, Monzo and Starling, several of which have made inroads in the U.S. market.

JPMorgan is betting that U.K. customers will value a modern offering from an established financial institution. That recipe has helped Goldman Sachs, which had to halt applications for its Marcus savings account last year after an influx of new accounts.

With reporting from CNBC’s Wilfred Frost.



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