JPMorgan is launching a digital financial institution within the UK subsequent week
Signage outside a Chase bank branch in San Francisco, Calif. On Monday, July 12, 2021.
David Paul Morris | Bloomberg | Getty Images
LONDON – JPMorgan Chase is preparing to launch its highly anticipated UK digital bank next week.
With the move, the US banking giant will take on major UK lenders like HSBC, Barclays, Lloyds and NatWest, as well as startups like Monzo and Starling.
JPMorgan will also step up its rivalry with Goldman Sachs, which launched its digital banking product Marcus in the UK in 2018.
New York-based JPMorgan first announced plans to launch its Chase brand in the UK earlier this year. Instead of setting up physical offices, JPMorgan will only offer its services through a mobile app.
It marks the first international expansion of JPMorgan’s consumer banking brand in its 222-year history.
The news was first reported by the Financial Times and later confirmed by CNBC.
Sanoke Viswanathan, CEO of JPMorgan’s international consumer division, said the bank’s expansion in the UK was a “very big strategic commitment”.
“We’re going to spend hundreds of millions before we break even and get to a place where this is a sustainable business, and we’re in no rush,” he told the FT.
Chase will initially offer checking accounts along with a rewards program. It also plans personal loans, investments, and mortgages as it progresses.
The UK is home to an increasingly crowded consumer market. Fintech-friendly regulations have allowed challengers like Monzo, Revolut and Starling, who offer checking accounts and other services through the smartphone, to thrive and become multi-billion dollar businesses.
Together, these digital banks have won millions of customers, some even trying their luck entering the US market. Revolut, which now has more than 15 million customers, was most recently valued at $ 33 billion, making it the UK’s most valuable tech start-up.
JPMorgan’s arrival in the UK will continue to put pressure on the country’s traditional lenders. The state-backed NatWest has notoriously tried to take on a rival digital bank called Bó against fintech challengers.
Under CEO Jamie Dimon, JPMorgan has attempted to combat the threat posed by fintech stars like PayPal and Square through a series of acquisitions.
As part of its expansion efforts in the UK, the bank agreed to acquire online wealth manager Nutmeg in June. Later that month, a deal was announced to purchase OpenInvest, an ethical investment platform based in San Francisco.
Earlier this month, JPMorgan announced it would acquire a majority stake in Volkswagen’s online payments division.