JP Morgan to launch digital lender in UK early next year
JPMorgan Chase is gearing up to launch its digital lender in the UK early next year.
In the first quarter of 2021, the US banking giant will look to go live with signed up suppliers. These include Amazon Web Services (AWS), and 10x Future Technologies, the venture set up by former Barclays chief Antony Jenkins.
Whilst the timetable is not yet finalised, an insider tells Sky News that the project could be unveiled within the first few weeks of 2021.
The new cloud-based venture will sit under the Chase brand, according to Sky News sources.
The US bank also recently re-hired the UK’s former chancellor, Sajid Javid, to one of its advisory boards.
What does this new market entry mean?
JP Morgan is yet to officially confirm the project’s existence, which was first unveiled by Sky News in February.
Clive Adamson, a former executive at the Financial Conduct Authority (FCA), will reportedly chair the venture.
The US bank’s entry into the UK consumer banking scene will be one of the most significant since the 2008 financial crisis.
JP Morgan Chase, valued at around $282.3 billion according to Bloomberg, is a significantly larger player than Goldman Sachs – valued at a lesser $74 billion.
Goldman launched its digital challenger – which offers personal loans and savings services – back in 2018. The bank had to pause savings accounts for new users in June after it experienced a deposit surge to £21 billion.
Currently, UK lenders are struggling to deal with ultra-low interest rates. A new lender entering the market could worsen this by sparking fresh price competition, hence putting further pressure on existing players’ margins.
JP Morgan’s move from the US to the UK
In the US, JP Morgan has more than 50 million digital banking customers. Its UK expansion will likely see similar offerings, including savings and current accounts, as well as consumer loan products.
A Sky News source dispelled rumours that JP Morgan’s challenger will look similarly to Goldman’s Marcus. The source says the new Chase-branded service will offer a wider range of products.
JP Morgan’s previous attempt at a digital challenger – called Finn – saw an early closure of the service after it experienced poor uptake from consumers.
Jamie Dimon, JP Morgan’s chief executive, has repeatedly warned of post-Brexit job losses. Most of these warnings have not come to fruition, and they stand in stark contrast to the bank’s plans to break into the UK.