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JPMorgan Chase Launches New Digital Bank in the UK: What do the Industry Think?

JPMorgan Chase has launched its new digital bank in the UK under the Chase brand. Chase is the largest consumer bank in the United States and provides a broad range of financial services to more than 60 million American households.

Customers can open a current account in minutes via the simple app after signing up on the website. The account offers a range of features to help people budget, manage money, spend and save. A UK-led customer support team will be a key part of the Chase banking experience. With just a few taps in the Chase app, customers will be connected to a specialist – 24 hours a day, 7 days a week.

Sanoke Viswanathan, CEO of the bank, said: “We’re offering people in the UK the opportunity to experience Chase for the first time with a current account that’s based on simplicity, a fuss free rewards programme and exceptional customer service.”

The Chase current account will launch with a rewards programme offering 1% cashback on all eligible debit card spend for 12 months. This has been developed in line with UK consumer debit card spending habits in order to ensure all customers can benefit from rewards on many of the things they already buy every day, including but not limited to groceries, travel, meals, entertainment, fashion, homewares, electronics, as well as flights and holidays.

There will be no fees to open the Chase current account and start earning cashback rewards. Customers will receive the cashback rewards without needing to switch their banking provider, commit to a minimum account balance or set up direct debits. The 1% cashback is payable when customers use their Chase debit card in person or online, and will be offered at retailers at home and abroad.

In addition to a simple and straightforward rewards programme, Chase also features:

  • Customisable additional current accounts to simplify money management: configurable through the Chase app in seconds and designed to help people budget, set aside, save and spend in the way that works best for them. Each Chase account comes with its own unique account number, and the Chase debit card can be linked to it instantly, so customers can spend at any time from the account of their choice.
  • Small change round-ups on which they will earn 5% interest for 12 months: customers can save as they spend by rounding up their debit card purchases to the nearest £1, and depositing the small change into a separate account where it will earn interest at 5%** for 12 months. Round-ups will be rolled out to all customers over the coming weeks.
  • Fee-free debit card use abroad: customers won’t be charged any fees by Chase when using their card while travelling, including for cash withdrawals at ATMs abroad.
  • A numberless debit card: card details are stored behind a secure login on the Chase app, so customers don’t put their account details at risk if they lose their physical card. They can still continue to use their Chase card via their digital wallet. The debit card has been made from recycled plastic (rPVC) and all card packaging is made from recycled materials and everything is fully recyclable.

“Having spoken extensively to consumers across the UK, we know that people want good value combined with an excellent experience, from a trusted bank. With cashback on everyday debit card spend and an interest boost on round-ups, we can help customers save while they spend on items they already buy every day,” said Viswanathan.

Chase intends to introduce a broad range of banking products in the future, including new current account features, savings and investment accounts, and lending products.

The UK Banking industry

The launch this week has been making waves in the UK fintech sector and many industry leaders have welcomed the news.

James Allum, VP & Head of Europe at Payoneer, said: The launch of JP Morgan Chase demonstrates just how much customer and business expectations have shifted. These changing expectations are driving the very innovations in banking currently dominating the headlines.
“The drive to innovate is drawing on the strength of the fintech sector. Many banks actually don’t have the necessary digital capabilities in-house as they weren’t built with modern-day, digital business needs in mind.
“The line between business and individuals is blurring with more individuals entering the digital economy and becoming their own micro business. As the world becomes more digital and connected, barriers to entry for the global economy are coming down but the complexity of local regulations across a global market, along with legacy payment systems, has created a massive challenge to modern businesses.
“Modern banking infrastructure hasn’t evolved quickly enough to help address these challenges and this is the very shift JP Morgan Chase is set to capitalise on. We’ve become accustomed to accessing information in real-time and seeing an instant movement of money at little to no cost.”
Competition in the market

Steve Taklalsingh, MD UK Business, Amaiz  said: “The marketplace in the UK is crowded, but that can only be a good thing for customers. The traditional high street banks failed to embrace digital fast enough leaving space for new digital banking services like this and Amaiz. Many people, including me, were concerned that the lack of equivalence with the EU following Brexit, would make the UK less attractive to FinTech companies. JP Morgan’s confidence in the UK market may therefore encourage the sector to be more optimistic about the post-Brexit future of financial services.”

“This move by JP Morgan shows how even the most established financial institutions are accelerating their presence in the digital space. said Gareth Lewis, chief executive and co-founder of Delio.

“Seeing JP Morgan take this step should encourage other established institutions to explore the opportunities offered by digital solutions. This, in turn, will create chances for collaborative fintechs to demonstrate their value and establish partnerships with the larger banks. The view that fintech is competing with these institutions is simplistic and short-sighted; instead, technology should be seen as an enabler, supporting established banks to digitise all aspects of their offering, whether that’s retail banking, wealth management or investments services.” –

Asher Ismail, co-founder of UK fintech Uncapped said: “The news that JPMorgan Chase is opening a retail bank in the UK is, of course, very welcome. However, although the positive impact of challenger banks can be keenly felt in personal banking, their reach is not yet making the same difference when it comes to business banking, particularly when it comes to serving the needs of the growing number of digital-first small businesses.

Change is needed

Ismail believes the launch will be of particular interest to SME’s. “We are currently experiencing a small business boom in this country, with the largest increase in registered small businesses since 2012,” he continued.

“As many start-up businesses will tell you, legacy banking providers are simply not keeping up with current business realities, particularly as challenger banks lack credit offerings. Legacy banks don’t really understand the needs of digital entrepreneurs, and their dated infrastructure is not up to the standards required to help e-commerce businesses grow. It is no surprise that 82% of business owners say they are unhappy with their bank. Our economy is changing, with digital native businesses contributing an ever-increasing share to overall GDP. It is in everyone’s interest to ensure these businesses are successful, yet time and again we see their need for fast, flexible finance is not met.

“The technology being deployed to power e-commerce businesses should also be used to provide fast and fair funding. We now have the infrastructure in place to make this happen and alternative lenders are already using real-time data provided by their clients across APIs to offer bespoke credit and other novel banking services.

“Right now, in tandem with shaking up retail banking, we need a complete reinvention of fundraising for business founders. Small businesses need fast, agile, effective funding so they can focus on what they do best – growing their businesses. Change cannot come soon enough.”

Dima Kats, CEO of Clear Junction,  believes that JP Morgan’s entrance into the retail banking market is indicative of the seismic shift in the competitive landscape to offer better customer services and experiences.

“Its new platform, Chase, plans on being a one-stop-shop for customers,” he continued. “Its application acts as the gatekeeper for customers’ pensions, insurance, investments, mortgages, and even an interface to help save money on bills.

“The success of so many functions being integrated in one place hinges on APIs. Central to enhancing customer experience is data, and with open APIs, customers can readily share their financial data with other organisations. Banks already own masses of data, but when they can match that data with a fintech organisation, they can provide new services that give customers new and valuable insights – like advice on bills in this instance. More organisations and banks are entering similar partnerships to build better experiences and expand into new verticals and territories.”

Tempting UK Customers

Believing launching Chase in the UK to be a “sound strategic move”, Dorel Blitz, VP Strategy & Business Development, Personetics, said: “JPMorgan has the brand prestige, technology and deep pockets to make a powerful first impression. However, major banks and challengers alike have attempted to launch digital platforms, without convincing customers to adopt them as their primary bank account.

“How will Chase be any different? A bank’s biggest asset is its customers’ financial data. Chase can use this to understand users’ needs, personalise their banking experience and take a proactive role in the customer relationship. By reaching out with data-driven recommendations, banks can win customers’ trust by making their lives easier and finances healthier.

“From working with hundreds of the world’s top banks, we know that consumers are frustrated with the burden of decision-making and the admin involved in managing their finances. Mass digitalisation has led to a boom in personal finance apps. For banks to stay competitive and earn customers’ loyalty, it’s vital to offer a complete banking proposition, provide real-time financial advice and automate time-draining tasks.

“The UK is a global frontrunner in fintech innovation, particularly open banking. All eyes will be on Chase to see how they take advantage of favourable regulation to develop new solutions and tempt customers away from competing providers.”

Author

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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