JPMorgan targets UK bank launch in early 2021
Written by Hit Music Radio News on 21/08/2020
One of the world’s biggest banking groups is finalising plans to make its entry into the ranks of Britain’s online lenders early next year.
Sky News has learnt that JPMorgan Chase is targeting the launch of its online UK ‘challenger’ bank in the first quarter of 2021 – a move that will enable it to capitalise on the accelerating transition of millions of bank customers from branch-based activity to digital services during the COVID-19 pandemic.
Technology industry sources said that JPMorgan had signed up suppliers including Amazon Web Services and 10x Future Technologies, the venture set up by former Barclays chief Antony Jenkins, to provide it with cloud and digital banking infrastructure.
The Wall Street behemoth’s debut in Britain’s personal banking market will emerge under the Chase brand, according to insiders.
JPMorgan has yet to officially confirm the existence of the project, which was revealed by Sky News in February.
One insider said it could be unveiled within the first few weeks of 2021, although the timetable is not yet finalised.
It is expected to be chaired by Clive Adamson, a former executive at the Financial Conduct Authority.
When it does take place, the launch will be among the most significant new entries into the UK consumer banking sector since the 2008 financial crisis.
It could spark a new price war among lenders already struggling to deal with a protracted period of ultra-low interest rates, further depressing margins.
A number of existing digital lenders, including Monzo, have seen their valuations impacted by fierce competition for customers.
This week, Sky News reported that Atom Bank, another so-called “neobank”, was about to embark on an attempt to raise £150m from the sale of new shares to investors.
JPMorgan’s consumer banking business operates predominantly in the US, where it boasts that consumers can open an account online within five minutes, and now has well over 50 million digital banking customers.
Its expansion to the UK is likely to involve offering savings and current accounts, as well as a range of open banking services and loan products.
The bank has, however, faced setbacks in its digital expansion strategy, announcing last year that it was closing Finn, its online-only brand, after poor take-up from consumers.
When the new bank is launched, it would mean the two biggest names on Wall Street now operate consumer banks in the UK, following Goldman Sachs’ launch of Marcus in 2018.
Rival Citi previously owned Egg, the consumer lender, but sold it in separate transactions in 2011 to Barclays and the Yorkshire Building Society.
Earlier this year, a City source played down suggestions that the new Chase-branded service would be directly comparable to Marcus, saying it would offer a wider range of products.
The Chase brand’s entry to the UK market will come amid a tough environment for banks grappling with depressed margins and a surge in loan impairments triggered by the coronavirus pandemic.
For JPMorgan, which has a market value of nearly $300bn (£228bn), its plans contrast with warnings fired by Jamie Dimon, its chairman and chief executive, about its presence in the UK if Britain left the European Union.
Mr Dimon warned repeatedly of post-Brexit job losses, which have largely not materialised.
A JPMorgan spokesman declined to comment.
© Sky News 2020