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JPMorgan's (JPM) U.K. Digital Retail Bank Plans a Hiring Spree

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JPMorgan’s JPM digital retail bank Chase in the U.K. plans a hiring spree in order to be able to provide investment, savings, and a wide range of other banking services and loan products. Per a Reuters report, Chase is planning to add hundreds of staff in 2022, thus taking the total number of staff in the digital-only bank to more than 1,000.

The digital-only consumer bank under the Chase brand was launched by JPMorgan in the U.K. this September. Initially, a smartphone app was launched, which offered only current accounts. However, it was planned that eventually JPMorgan would provide other banking services and products through Chase.

Sanoke Viswanathan, who was appointed the CEO of the digital bank, said in September, “We’re offering people in the U.K. 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.”

Since its launch in September, Chase has already handled hundreds of millions of pounds of purchases across more than a million transactions.

Viswanathan recently said that the British digital bank has already hired nearly 200 people since its launch, thereby taking the total staff numbers to almost 800. As JPMorgan seeks to expand its product offerings in the U.K. through Chase bank, it is planning to hire hundreds of more staff next year.

JPMorgan plans to expand into investment and savings services in the U.K. by integrating Nutmeg, one of U.K.’s largest robo advisory firms that it acquired in June amid plans of establishing a banking presence in the region.

The U.S. banking giant also plans to replicate the Chase model in other markets across continental Europe in the next few years. Viswanathan said, “We had a plan, and we are definitely ahead of it. We want to be in all the major European markets over time, all being well. The idea is to be pan-European.”

Our Take

JPMorgan has been moving toward digitizing operations to better align with customers’ needs. These efforts are expected to support the bank’s profitability and boost market share amid a low interest rate environment.

Over the past year, shares of JPMorgan have gained 31.9% compared with 36% growth recorded by the industry.

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Currently, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

However, for JPMorgan, there is tough competition in the digital banking space in the U.K. Several local FinTech players like Monzo Bank Ltd. and Starling Bank Ltd. as well as large traditional banks like HSBC Holdings HSBC have been looking to expand digital offerings.

Earlier this month, HSBC added a function to its mobile app that enables customers to invest in a suite of funds for a minimum of 50 pounds. The move by HSBC was aimed at the younger generation of the U.K.

HSBC, which has an online investment advice service in the U.K., has been shifting into app-based wealth management off late to compete with other firms that offer low-cost trading and an easy-to-use digital app that appeals to younger clients.

Also, Goldman Sachs’ GS online-only bank Marcus — which began operating in the U.K. in 2018 and has more than 500,000 customers — poses a risk to JPMorgan’s expansion efforts.

Notably, the key source of Goldman Sachs’ earnings stability is its business diversification. Within traditional banking, a diversified product portfolio has better chances of sustaining growth than many other banks, which have exited some of these areas. Goldman Sachs has continuously been undertaking initiatives to boost its asset management and wealth management businesses, while expanding its digital consumer banking platform. The company remains on track to roll out digital checking facilities in 2022.

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