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JPMorgan to join British online banking chase within months

Iain Withers and Anna Irrera
·2-min read
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York

By Iain Withers and Anna Irrera

LONDON (Reuters) - JPMorgan will launch a digital consumer bank in Britain under its Chase brand within months, marking its first foray into an already competitive British market.

The new business has already recruited 400 people and will offer a range of products including current accounts, America's largest bank by assets said on Wednesday.

At a time of growth for online finance, JPMorgan's venture further ramps up competition in Britain's digital banking sector, where it will compete with Goldman Sachs' consumer brand, Marcus, which launched in Britain in 2018.

But in contrast to Goldman's saver-focused consumer launch, JPMorgan is planning a full-service bank used by customers multiple times a week, a source familiar with the project said, potentially posing a bigger threat to incumbent retail lenders.

The source said that JPMorgan planned to expand services after launching a current account and had not ruled out the prospect of opening Chase branches in Britain over the longer term, adding that the model could be replicated in other countries if successful.

The new digital bank will also be competing with start-ups such as Starling and Monzo, which have chipped away at the market share of Britain's four largest banks.

Digital financial services globally have been among those to benefit during the COVID-19 pandemic, with more homebound consumers adopting online banking and investing.

This is not JPMorgan's first attempt at a digital-only bank.

It launched a smartphone bank called Finn in its home market in 2017 but shut it down a year after its nationwide debut.

Other large banks have also had mixed results when attempting to fend off competition through new digital offshoots. NatWest said in May that it was scrapping its digital bank Bó after a tepid reception from consumers.

Sanoke Viswanathan, previously chief administrative officer for JPMorgan's corporate and investment bank, has been named as chief executive of the new digital bank, which will be headquartered in London's Canary Wharf financial district.

Its customers will be supported from a new call centre in Scottish capital Edinburgh, which has long been home to a strong financial services sector.

Reports of a likely tilt by JPMorgan at the British consumer market have been circulating for about a year, but the bank had publicly disclosed few details.

"The UK has a vibrant and highly competitive consumer banking marketplace, which is why we’ve designed the bank from scratch to specifically meet the needs of customers here," Gordon Smith, CEO of consumer and community banking for JPMorgan, said in a statement.

(Reporting by Iain Withers and Anna Irrera; Editing by Jan Harvey, Alexander Smith and David Goodman)