US banking giant JPMorgan is to launch a UK digital bank later this year in an attempt to acquire a share of an increasingly crowded market.
The bank will adopt the Chase branding and offer a number of savings and lending products, according to Sky News.
JPMorgan will be following the lead of rival Goldman Sachs, which launched its Marcus brand in the UK in 2018 and now boasts over 300,000 customers.
Rumours of JPMorgan's intentions have been circulating for some time. In June 2019, the US bank reportedly expressed interest in a sizeable investment in UK fintech, 10x Future Technologies, which offers a cloud-based plug-and-play platform to kickstart digital banking operations.
Where Marcus currently offers only savings products to its UK customers, JPMorgan also intends to provide current accounts and a range of loans products and open banking services, according to an insider.
JPMorgan's previous attempt at offering digital-only banking was short lived, with US mobile brand Finn lasting only a year before being shut down in June 2019.
It was announced that take-up had been poor and that Finn customers would have their funds transferred to Chase accounts.
JPMorgan clearly sees the UK as a more conducive market to digital banking given the successes of providers such as Monzo and Revolut.
The FT reports that JPMorgan is tapping former head of supervision at the FCA, Clive Adamson, to chair the new bank.
Adamson recently chaired the risk commitee at Virgin Money until departing last November.
According to a new report by Accenture, digital banks now boast 19.6 million customers in the UK. Over six million customers were added to their books in the second half of 2019 alone, equating to a growth rate of 150% over the course of the year.
However, the report also points to signs of this slowing, with customer growth decreasing by 20% in the second half of last year, while the average deposit balance slipped from £350 per customers to £260.
Accenture's analysis also highlights the eternal question of profitability for digital banks, something unlikely to be a problem for a financial behemoth like JPMorgan.