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The Wall Street stalwart has named Sanoke Viswanathan, who was Chief Administrative Officer and Head of Strategy in the corporate and investment bank, to lead the UK digital challenger. Viswanathan told the Times and Financial Times today that JPMorgan’s first overseas retail bank would launch in the UK next week on Tuesday.
“This is a very big strategic commitment from the firm’s standpoint. We will spend hundreds of millions before we get to break-even and get to a place where this is a sustainable business, and we’re not in a rush,” he added.
JP Morgan said it rolls out the millennial-geared service to onboard “millions of customers over time”, before expanding into other countries in Europe and Latin America.
The digital bank is headquartered at Canary Wharf, London, and it has already created 400 UK jobs with more hires planned as it grows.
In 2020, the world’s largest lender by market cap was reportedly on the verge of closing to make an entry in the UK’s retail banking sector. JPMorgan, which has over $3 trillion on its balance sheet, has been in discussion with the FCA and other regulators to get the necessary confirmation and approvals to launch a digital bank.
The Chase-branded neobank signed up Amazon Web Services and 10x Future Technologies to provide them with cloud and digital banking infrastructure.
The launch could spur a shakeup in competition and prices among incumbent lenders, including with its rival Goldman Sachs that launched its retail consumer bank, Marcus in the UK in 2018.
Marcus had attracted nearly 500,000 British customers and more than $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 broader audience though it is not clear whether it will also tap the UK mortgage market.
However, Marcus was slowing growth of its UK online-only bank after deposits surged near to regulatory limits which would require stricter regulations.
New York-based JPMorgan claims consumers can open an account online in under 5 minutes and has more than 50 million users, but its consumer banking business has mainly operated in the US so far. JP Morgan’s UK arm is likely to offer savings and current accounts, but its open banking services and loan products will be entering a tough market against challengers in the UK.
In its previous attempt, America’s biggest bank offering for digital-only banking was short-lived, with its Finn brand lasting merely a year after launching it in the US in June 2018.
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