With an aim of capitalizing on acceleration of the digital banking boom owing to the coronavirus pandemic, JPMorgan JPM intends to launch an online-only bank in the U.K. early next year. This was first reported by Sky News, citing persons familiar with the matter.
It will continue to use the Chase brand name for providing online banking services in the country. The company intends to provide savings and current accounts, along with a wide-range of banking services as well as loan products.
Further, citing technology industry sources, Sky News stated that JPMorgan has signed agreements with many partners including Amazon's AMZN Amazon Web Services and 10x Future Technologies, a fintech firm founded by former Barclays CEO Antony Jenkins.
Moreover, JPMorgan has roped in former U.K. Chancellor Sajid Javid as a member of one of the advisory boards. Earlier, in February, it appointed Clive Adamson — former head of supervision at the Financial Conduct Authority — as the chairman of the digital bank.
JPMorgan will face tough competition in the digital banking space in the U.K. Several local FinTech players like Monzo Bank Ltd. and Starling Bank Ltd., as well as large traditional banks including HSBC Holdings HSBC and Barclays are looking to expand digital offerings. Further, Goldman Sachs’ GS online-only bank Marcus — which began operating in the U.K. in 2018 and has more than 500,000 customers — poses a risk to the company’s expansion efforts.
In the United States, the bank has more than 50 million digital banking consumers. However, JPMorgan faced a setback in digital expansion initiatives when it had to close the online-only bank — Finn — in June 2019 due to poor customer response.
Despite these hurdles, JPMorgan is expected to continue its efforts toward digitizing operations to better align with customer needs. These efforts are expected to support the company’s profitability and boost market share amid a low interest rate environment.
Shares of this Zacks Rank #3 (Hold) company have rallied 8.8% in the past three months, marginally outperforming the industry’s rise of 8.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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