JPMorgan Chase has hired 400 people to create a digital bank in the U.K., the financial giant has disclosed.
The new bank is being tested inside the company, using employees as customers, before opening to the public later this year. The bank will begin by offering checking and savings accounts, then move into loans and a broader range of services once the new bank is established, according to the Wall Street Journal.
The new digital bank will jostle for market share with online British entrants Starling Bank and Monzo Bank, which British regulators permitted after the Great Recession to increase competition in the country’s financial sector.
“We’ve designed the bank from scratch to specifically meet the needs of customers” in the U.K., Gordon Smith, JPMorgan’s CEO of consumer and community banking, said in a statement quoted by the Journal.
JPMorgan considered trying to buy Starling Bank last year, insiders say.
Starling has about two million customers and £4.7 billion on deposit.
“Starling set out to disrupt the banking landscape and the fact that big banks are now copying us shows that we are succeeding, so we welcome competition,” said Starling founder Anne Boden in an interview with the Journal.
“Big banks don’t have a great record of creating challenger brands or building software in a cost-effective manner,” she said. “They are copying our features but they are unable to copy our cost base and culture for innovation.”
TREND FORECAST: As we have long forecast, the world is going from “DIRTY CASH TO DIGITAL TRASH,” and China will lead the charge. (See our 20 October article, “CHINA: DIGITAL CURRENCY WORLD LEADER.”)
