Inside JPMorgan's plans to boost wealth management, grow overseas, and battle fintech competition
Business Insider
- JPMorgan is the biggest US bank by assets.
- The firm has big plans for wealth management and international growth.
- Meanwhile, it's gearing up for a battle with fintechs. "I expect there to be very tough, brutal competition in the next 10 years," JPMorgan CEO Jamie Dimon said on Friday. "I expect to win. So help me, God."
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JPMorgan is the biggest bank in the US and a bellwether for the global financial system. So when it comes to the bank's most senior leaders and their plans, Wall Street pays attention.
Tech investment and the battle with fintechs
The decades-long race between big banks and fintechs is coming to a head. Citing the massive valuations of fintech standouts like PayPal, Stripe, Visa, and Mastercard, Wells Fargo analyst Mike Mayo asked JPMorgan CEO and chairman Jamie Dimon how he plans to win during the bank's fourth-quarter earnings call on Friday.
"We've been doing fine in the last 5 years," Dimon said, adding that he sent a list of company valuations - including PayPal ($280 billion), Mastercard ($322 billion), Alibaba ($658 billion), Facebook ($715 billion), Google ($1.2 trillion), and Apple ($2.1 trillion) - to the bank's operating committee.
The companies have surpassed or are catching up to JPMorgan's roughly $422 billion market cap.
"Absolutely, we should be scared shitless about that," Dimon said.
Read more:
- JPMorgan CEO Jamie Dimon wants to win the war against fintechs, expecting 'tough, brutal' competition in the next 10 years
- Goldman Sachs, JPMorgan, and Citi are Wall Street's most active fintech investors. These are 10 startups they've poured money into.
- Here's a look at what technologists get paid at JPMorgan, where senior engineers can make upwards of $200,000
- Google is overhauling its Pay app to be a one-stop shop for your financial life - and teaming up with Citi and other banks to do it
Wealth management plans
JP Yim/Getty Images for Girlboss Rally NYC 2018
The firm is planning to significantly expand its financial advisor force, bringing the firm closer in size and scope to its rival firms in wealth management. Over the next five to six years, the bank is considering hiring as many as 4,000 advisors to roughly double its current base, US Wealth Management Chief Executive Officer Kristin Lemkau told Business Insider this fall.
Lemkau, who has been with the bank for over two decades and was previously its chief marketing officer, was named head of JPMorgan's new wealth division in December 2019. Its various wealth businesses, including its self-directed wealth product, were reorganized under one umbrella.
Rivals have also been making deals in the asset-management space, putting a spotlight on JPMorgan's own plans.
Read more on JPMorgan's wealth management plans:
- How JPMorgan's Kristin Lemkau is planning to turbocharge the firm's $500 billion wealth business, from a rebrand and ramping up advisor training to new tech
- JPMorgan's wealth boss Kristin Lemkau is eyeing plans to hire as many as 4,000 advisors as she lays out ambitious plans to catch up to the firm's rivals
International commercial-banking push
Kena Betancur/AFP via Getty Images
On a call with analysts this week, Dimon this week estimated that JPMorgan could eventually add more than 1,000 new clients overseas as it looks to eventually generate $1 billion of international revenue via the commercial bank.
While the process is still in the early days, Dimon said the bank has already begun to reap some rewards by putting additional resources into nabbing new business in international markets. He cited Asia as being a region where the bank had one of its best years ever in 2020.
Dimon also took the opportunity to poke fun at a former colleague and current competitor.
"But tell Charlie, 'You can't imitate me on this one,'" Dimon said, referring to Wells Fargo CEO and one-time protege Charlie Scharf. Scharf, who spent nearly a decade at JPMorgan Chase, is aiming to expand Wells Fargo's presence in investment banking, an area the bank hasn't traditional had a strong foothold, Bloomberg reported in early January.
JPMorgan CFO Jennifer Piepszak elaborated on JPMorgan's international aspirations for its commercial bank. She cited the fact JPMorgan's corporate investment bank (CIB) has already established roots in many of the regions, which could help the bank's efforts on growing its commercial bank.
'Virtual bankers'
Chase
There's no shortage of options for those looking to bank online, particularly as the COVID-19 pandemic has made mobile functionality and high-touch digital services essential for banks.
But for questions that can't be answered easily on an app or in a chat box - from saving money for college to setting up an emergency savings account - it's not always easy to visit a bank branch, particularly now.
It's something Chase hopes to address with a new virtual banking tool that lets existing customers video conference with bankers remotely. The program, which has been piloted for about two years nationally, will begin an official roll out in January, Gerrod Parchmon, head of virtual banking at Chase, told Business Insider.
Chase has hired around 150 new bankers in its Ohio hub, and are planning on doubling its team of virtual bankers in 2021 by hiring in places like Chicago and Phoenix
Here's a rundown of what JPMorgan has said about M&A plans:
- JPMorgan and BlackRock are both looking to take part in the massive wave of money-manager mergers. Their execs gave some clues on what they could buy.
- Morgan Stanley's big bet on Eaton Vance is the latest in a wave of asset manager M&A. Bankers and industry experts told us the 4 firms that could be the next target.
- Jamie Dimon says JPMorgan will be 'much more aggressive' on acquisitions just days after Morgan Stanley revealed plans to buy E-Trade
- Industry insiders reveal the 5 companies they think JPMorgan could try and buy after Jamie Dimon said the bank would be 'much more aggressive' on M&A
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