JPMorgan Chase, the biggest US bank by total assets, is going ahead with plans to launch its city digital challenger, which includes a range of savings and loan products under its Chase brand in the UK.
The Wall Street stalwart has named Sanoke Viswanathan, who was Chief Administrative Officer and Head of Strategy in the corporate and investment bank, to lead the new business.
“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,” said Gordon Smith, the Co-president who leads consumer and community banking.
Smith added in a statement Wednesday they are targeting “the coming months” to roll out the millennial-geared service, which was code-named “Dynamo.” The digital bank is headquartered at Canary Wharf, London, and it has already created 400 UK jobs with more hires planned as it grows.
In 2020, the world’s largest lender by market cap was reportedly on the verge of closing to make an entry in the UK’s retail banking sector. Since February, JPMorgan has been in discussion with the FCA and other regulators to get the necessary confirmation and approvals to launch a digital bank.
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Finn’s Downfall and Its Similarity to Chase’s New Venture
The Chase-branded neobank will likely be signing up Amazon Web Services and 10x Future Technologies to provide them with cloud and digital banking infrastructure.
The launch could spur a shakeup in competition and prices among incumbent lenders, including with its rival Goldman Sachs that launched its retail consumer bank, Marcus in the UK in 2018. Marcus had attracted nearly 500,000 British customers and more than $20 billion in UK deposits, but the current offering is smaller than what JP Morgan intends to launch. The new venture is likely to target a broader audience though it is not clear whether it will also tap the UK mortgage market.
However, Marcus was slowing growth of its UK online-only bank after deposits surged near to regulatory limits which would require stricter regulations.
New York-based JPMorgan claims consumers can open an account online in under 5 minutes and has more than 50 million users, but its consumer banking business has mainly operated in the US so far. JP Morgan’s UK arm is likely to offer savings and current accounts, but its open banking services and loan products will be entering a tough market against challengers in the UK.
In its previous attempt, America’s biggest bank offering for digital-only banking was short-lived, with its Finn brand lasting merely a year after launching it in the US in June 2018.