JPMorgan ventures into UK retail banking with digital-only launch

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JPMorgan Chase has confirmed it will launch a long-rumoured assault on the UK retail banking market with the opening of a digital-only bank later this year.

The new bank will operate under the Chase brand, and makes JPMorgan the second Wall Street firm to make a foray into the UK market in recent years, following the launch of Goldman Sachs’ Marcus business in 2018. 

JPMorgan’s early plans are more ambitious than Marcus, which has so far been limited to savings accounts in the UK. It said on Wednesday it would start by offering “a new take on current accounts”, and recent job adverts confirmed it was also developing new lending products.

Daniel Pinto, JPMorgan co-president, said: “Our decision to launch a digital retail bank in the UK is a milestone, introducing British consumers to our retail products for the first time. This new endeavour underscores our commitment to a country where we have deep roots, thousands of employees and offices established for over 160 years.”

JPMorgan is entering a crowded market for digital banking in the UK. Local start-ups such as Monzo and Starling have gathered millions of customers over the past few years, but none of them have so far managed to build sustainably profitable businesses.

Returns in the UK have historically been much lower than in Chase’s home market of the US. In 2019 JPMorgan’s consumer banking business earned a return on equity of 31 per cent, almost double the best-performing UK high-street lender.

JPMorgan chairman and chief executive Jamie Dimon has previously said that “it doesn’t make sense to do normal retail banking overseas” owing to low returns, but signalled a change in direction last year when he said that new technology could make it more appealing. 

Win Bischoff, the former chair of Lloyds Bank and the UK’s audit regulator, has joined the board of the new project, which JPMorgan has been working on in secret for several years.

Sir Win, who also led Citibank at the height of the financial crisis and was previously chairman of JPMorgan’s main European holding company, will be head of the board risk committee, according to regulatory filings and people familiar with the situation.

The appointment of a prominent City of London grandee highlights the resources the Wall Street giant is dedicating to the expansion plan.

The bank has also named Clive Adamson, previously a senior official at the Financial Conduct Authority, to chair the new business. It has assembled a team of longstanding JPMorgan executives to lead the launch.

Sanoke Viswanathan, previously chief administrative officer in its corporate and investment bank, was announced as chief executive on Wednesday.

He will be joined by Matthew Melling, the former chief financial officer of its UK markets subsidiary, as CFO, according to regulatory filings. Sanjiv Somani will become chief operating officer, while Michelle Scales, a veteran of JPMorgan’s US consumer bank, will be chief risk officer.

The new UK business will operate on a separate technology platform to JPMorgan’s US retail arm, and the group has hired several engineers from banking start-ups such as Revolut, Starling, Monzo, Mettle and Solarisbank.

JPMorgan said about 400 people were working on the new bank, with further expansion planned.

Gordon Smith, JPMorgan chief of consumer and community banking, said: “The UK 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.”

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