JPMorgan Chase to Launch U.K. Digital Consumer Bank -- 2nd Update
January 27 2021 - 11:31AM
Dow Jones News
By Simon Clark
JPMorgan Chase & Co., the largest U.S. lender, is launching
a digital bank to offer consumer banking services in the U.K. for
the first time.
The new bank will bear the Chase brand and will be based in
London's Canary Wharf financial district, as well as operating a
customer contact center in Edinburgh, JPMorgan said Wednesday. The
digital bank has already hired 400 people in the U.K. and plans to
add more as it grows, the company said.
JPMorgan enters a crowded digital marketplace in the U.K. for
consumer banking. The market has flourished as regulators
encouraged new startups, including Starling Bank Ltd. and Monzo
Bank Ltd., to boost competition in the wake of the last global
financial crisis. These so-called challenger banks have forced
traditional lenders to improve their digital offerings but have
struggled to earn profits.
"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," said Gordon Smith,
chief executive of consumer and community banking at JPMorgan.
The new JPMorgan bank will be led by Sanoke Viswanathan,
previously the administrative chief and head of strategy at
JPMorgan's corporate and investment bank. The digital bank is
currently being tested internally with JPMorgan employees ahead of
a public launch later this year. It will start by offering current
accounts and then offer a broader range of products including
loans, according to a person familiar with the situation.
JPMorgan last year considered making a bid for Starling Bank,
founded by Anne Boden in 2014, according to people familiar with
the situation. Starling has about two million customer accounts and
GBP4.7 billion of deposits, equivalent to $6.43 billion.
"Starling set out to disrupt the banking landscape and the fact
that big banks are now copying us shows that we are succeeding. So
we welcome competition," Ms. Boden said in an interview. "The big
banks don't have a great record of creating challenger brands or
building software in a cost-effective manner. They are copying our
features, but they are unable to copy our cost base and our culture
for innovation."
JPMorgan previously tried to launch a digital bank in U.S.
cities and markets where it didn't have Chase branches, but closed
the product, called Finn, in June 2019 after slow pickup. Bank
executives have said they learned lessons from that program,
including that the Chase brand resonated better than a new name.
JPMorgan said Wednesday that it has about 55 million digitally
active customers in the U.S.
David Benoit and
Dave Sebastian
contributed to this article.
Write to Simon Clark at simon.clark@wsj.com
(END) Dow Jones Newswires
January 27, 2021 11:16 ET (16:16 GMT)
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