JPMorgan Chase & Co.- Creating a Next-Gen Banking Experience Powered by Digital Technology
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Case Code: BSTR608 Case Length: 14 Pages Period: 2006-2019 Pub Date: 2020 Teaching Note: Available |
Price: Rs.400 Organization : JPMorgan Chase & Co. Industry : Banking Countries : United States Themes: Digital Strategy, Digital Ecosystem Technology Strategy, Growth Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Technology at the Core of Banking
JPMC used the latest technologies such as Big Data, Cloud computing, Artificial Intelligence (AI), ML, Blockchain, Robotics, Mobile and electronic payments, and Cyber security to develop and improve its banking operations. Larry Feinsmith (Feinsmith), MD and Head of Global Tech Strategy, Innovations and Partnerships at JPMC, said, "We are an unexpected disruptor in banking and in the technology industry. Because technology changes so quickly we are not only developing technology for today, but we are also anticipating the technology needs of our consumers five-to-ten years down the road."...
'Mobile First, Digital Everything'
The 'Mobile First, Digital Everything' term was coined by Dimon when he became the CEO of JPMC in 2006. While most of the banks at that time were outsourcing their technology requirements to third parties, Dimon emphasized that JPMC should build its own technology rather than outsource it as other banks had done. As of 2018, JPMC had spent more than ten percent of its revenues on technology and digitization. And JPMC’s digital focus seemed to be paying off, judging by the steady growth in its active digital and active mobile customers over the years. JPMC’s active digital customers had increased from 43.8 million in 2016 to 51 million till the second quarter of 2019, a year-on-year (YoY) growth of 6%, while the number of active mobile customers had gone up from 26.5 million in 2016 to 35.4 million till the second quarter of 2019, a YoY growth of 12 %. ..
Shaping the Future of Banking
JPMC was focusing on creating a digital banking ecosystem that would include all its products and services as well as partners’ products and service offerings. This was expected to position it more comfortably in the future against the competition. It partnered with platform players in areas such as online mortgages, auto financing, and peer-to-peer consumer payments and small business loans. JPMC had invested in more than 100 platform companies working in these areas. In addition to the traditional banking products, JPMC also partnered with platform players to offer digital solutions in non-traditional product categories. During 2017-18, JPMC had invested more than US$ 20 billion in developing new products for investment advice, digital banking, cyber security, and trading. The digital solutions included Chase Business Quick Capital in partnership with OnDeck, Chase Digital Mortgage in partnership with Roostify, and Chase Auto Direct in partnership with TrueCar...
Big Tech Threat to JPMC
By 2019, JPMC had emerged as a disrupter in the banking/financial services industry with breakthrough innovations in financial products and services. But there was an ever-growing threat to it from technology/platform players. Apple had forayed into the payments business with its mobile payment and digital wallet service ‘Apple Pay’ with a presence in over 40 countries across the globe in Latin America, Europe, Canada, the US, the Middle East, and Asia-Pacific. Amazon’s ‘Amazon Cash’ enabled customers to load money into their accounts and shop at participating stores. Another product from Amazon, ‘Amazon Lending’, offered loans to small business owners. As of June 2018, Amazon had provided loans to more than 20,000 Amazon sellers amounting to US$ three billion...
Exhibits
Exhibit I: JPMC Open Positions
Exhibit II: Key Features of Quorum
Exhibit III: Active Digital and Active Mobile Customers
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