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Fintech is here to stay, says JPMorgan chief Jamie Dimon

Fintech is here to stay, says JPMorgan chief Jamie Dimon

Fintech companies are set to win significant market share from banks says JPMorgan's Chase chief Jamie Dimon, who laments the regulatory constraints that hobble banks as they face up to the threat from Big Tech competitors.

In his annual letter to shareholders, Dimon says that it is "completely clear" that many banking products such as payments, deposits and loans are moving out of the banking system to neobanks and non-banks alike.

Dimon acknowledges that many of these new competitors have done a "terrific job" in easing customers’ pain points and making digital platforms slick and simple to use. However, they have also benefited from differences in the regulatory playing field

"We should remember that the quantum of risk may not have changed - it just got moved to a less-regulated environment," states Dimon. "And new risks get created. While it is not clear that the rise in nonbanks and shadow banking has reached the point of systemic risk, this trend is accelerating and needs to be assiduously monitored."

To compete, banks need to invest in AI and machine learning tools and accelerate a shift to cloud-based banking, the CEO says. Banks also need to be faster and bolder in how they attack new markets: "Sometimes new markets look too small or appear not to be critical to our customer base - until they are. We intend to be a little more aggressive here."

Dimon is not relying too much on any immediate change in the regulatory envrionment, conceding that banks will just have to adapt their stretegies to contend with the hand they have been dealt.

“While I am still confident that JPMorgan Chase can grow and earn a good return for its shareholders, the competition will be intense, and we must get faster and be more creative,” Dimon states. “Acquisitions are in our future, and fintech is an area where some of that cash could be put to work.”

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 08 April, 2021, 13:08Be the first to give this comment the thumbs up 0 likes

Acquisitions are not only in future but also in the past of Financial Institutions, as I highlighted in Fintech Shouldn’t Stop Chanting The Disruption Mantra

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