JPMorgan Chase to open UK neobank next week
JPMorgan Chase, America’s largest bank in terms of total assets, will launch its city’s digital bank next week, which offers a range of savings and loan products under its ‘Chase’ brand in the UK.
The Wall Street mainstay has appointed Sanoke Viswanathan, who was the corporate and investment bank’s chief administrative and strategy officer, to lead the UK digital challenger. Viswanathan told The Times and Financial Times today that JPMorgan’s first overseas retail bank will launch in the UK next week on Tuesday.
“This is a very important strategic commitment from the firm’s point of view. We’re going to spend hundreds of millions before we break even and get to a point where it’s a sustainable business, and we’re in no rush, ”he added.
JP Morgan said it was deploying the Millennial Service to onboard “millions of customers over time,” before expanding to other countries in Europe and Latin America.
The digital bank is headquartered in Canary Wharf, London, and it has already created 400 jobs in the UK with more hires expected as it grows.
In 2020, the world’s largest lender by market capitalization is reportedly set to close to enter UK retail banking. JPMorgan, which has more than $ 3 trillion on its balance sheet, has been in discussions with the FCA and other regulators to get the confirmation and approvals needed to launch a digital bank.
The Chase-branded neobank has signed on to Amazon Web Services and 10x Future Technologies to provide them with cloud and digital banking infrastructure.
The launch could cause competition and pricing disruption among legacy lenders, including with rival Goldman Sachs which launched its retail consumer bank Marcus in the UK in 2018.
Marcus had attracted nearly 500,000 UK customers and over $ 20 billion in UK deposits, but the current offering is smaller than what JP Morgan intends to launch. The new venture is likely to target a wider audience, although it is unclear whether it will tap into the UK mortgage market as well.
However, Marcus was slowing the growth of his UK-only online banking after deposits approached regulatory limits, which would require tighter regulations.
New York-based JPMorgan says consumers can open an account online in under 5 minutes and has more than 50 million users, but its consumer banking business has so far mainly operated in the United States. JP Morgan’s UK arm will likely offer savings and checking accounts, but its open banking and lending products will enter a tough market against UK competitors.
In its previous attempt, America’s largest banking offering for digital-only banking was short-lived, with its Finn brand only lasting a year after it launched in the United States in June 2018.