Fintech is here to stay, says Jamie Dimon, Head of JPMorgan
Fintech companies are set to gain significant market share from banks, said Jamie Dimon, chase chief of JPMorgan, who laments the regulatory constraints hampering banks as they face the threat of Big Tech competitors.
In his annual letter to shareholders, Dimon says it is “quite clear” that many banking products such as payments, deposits and loans are exiting the banking system for neobanks and non-banks.
Dimon recognizes that many of these new competitors have done a “great job” in alleviating customer issues and making digital platforms simple and easy to use. However, they also benefited from differences in the regulatory playing field.
“We have to remember that the level of risk may not have changed – it has just been moved to a less regulated environment,” says Dimon. “And new risks are being created. While it is not certain that the rise in non-bank and shadow banks has reached the stage of systemic risk, this trend is accelerating and should be monitored closely.”
To be competitive, banks need to invest in AI and machine learning tools and accelerate the shift to cloud banking, the CEO said. Banks also need to be faster and more daring in the way they attack new markets: “Sometimes new markets seem too small or don’t seem to be critical for our customers – until they are. intend to be a little more aggressive here. “
Dimon is not relying too much on an immediate change in the regulatory environment, conceding that banks will simply have to adapt their strategies to cope with the hand they have been given.
“While I am still convinced that JPMorgan Chase can grow and deliver good returns for its shareholders, the competition will be intense and we need to be faster and more creative,” says Dimon. “Acquisitions are in our future, and fintech is an area where some of that money could be put to use.”