Jamie Dimon on competing with #fintech : Top Fintech findings from JPMorgan Chase & Co. (NYSE:JPM) Q4 2020 Results Earnings Conference Call January 15, 2021 8:30 AM ET
It is always the pleasure to listen to Mr Jamie Dimon: He sees the forest from the trees. His experience navigating WallStreet for so long, all fines, penalties, massive regulation... There is one and only Jamie Dimon. Nobody comes close. I had the pleasure to meet and discuss with Mr Dimon during the latest Davos conference, one year ago. After that I am listening to Mr Dimon even more carefully.
During the conference call, there were quite many questions and answers related to Tech and Fintechs. Basically, the message is: JPMorgan gears up for a fintech fight.
The most important quotations by Jamie Dimon:
“ Because the banking system itself is getting smaller as mortgages go to the non-banks and private credit goes elsewhere, and the rest of the international, Chinese banks are growing, et cetera. So these adjustments should be made.”
“The cloud is real. The cost is real. The speed is real. The security is real. The AI is real. The machine learning is real. So every single business and with every single meeting we go through is talking about what are we moving to the cloud, whether it’s internal or external? What are we adding AI machinery on? Are we getting the data analytics right and it is global. It’s -- and we don’t spend that much time on it. But every single business is doing it.”
“You have a tremendous amount of AI being used in asset wealth management, CIB, in trading, in Commercial Banking prospecting and it’s literally the tip of the iceberg. Whatever we say today, 10 years from now, it will be probably 50 times more than we are doing today. And I would spend anything to get it done faster.”
“ And we are using blockchain for sharing data with banks already and so we are at the forefront of that which is good. The other question was about fintech. Look first of all, they are very good competitors. I pointed out to a lot of people, PayPal were $250 million, Squares were done in $20 million, Stripe is worth $80 billion, Ant Financial is down quite a bit now.
But they are there. They are strong. They are smart, some effectively ride the rails. So we bank a lot of them. We help them accomplish what they want to accomplish and you have. So my view is we are going to compete, we will need to and we have to look at our -- look inside about what we could do better or could have done better and things like that.”
“ So I am confident we will be able to compete. But I think we now are facing old generation of newer, tougher, faster competitors who -- and if they don’t buy the rails of JPMorgan, they can buy rails of someone else.”
“So you see, I have told you before, everyone is going to be involved in payments. Some banks going to white label, which makes which makes fintech competitors white label the bank and build every sort of thing on top of it and we have to be prepared for that. I expect it to be very, very tough competition in the next 10 years. I expect to win. So help me God.”
“Like I said, banks are white labeling. So it’s effectively the same thing.”
“If a fintech companies uses a white label bank just to process their business, they are basically a bank. When -- what the regulator will do, I don’t know, but we have to assume that they are going to do it. And that some don’t need, will find ways, not to use their banking system, which they have done.”
“I mean, if you look at a whole bunch of the things they have used stuff around the banking system, which is fine, I am not against that. The regulators may have a point of view about that one day, but I am less worried about that. I am going to worry about us.”
“We have been doing fine over these five years. But we are just lucky. But I do agree with you, I gave that to the management team. My whole operating committee a little deck that show Visa 500 billion, Mastercard 350 billion, PayPal 220 billion, Ant Financial 600 billion, Tencent 800 billion, Alibaba trillion, Facebook, Google, Apple, Amazon, you go on and on. But absolutely, we should be scared chillers about that.”
My takeaway; many interesting angles to the Fintech topic and Jamie Dimon sizing up the cloud opportunity: "It's literally the pit of the iceberg. Whatever we say today, 10 years now it will be probably 50 times more than what we're doing today. And I would spend anything to get it done faster."
Photo: Jamie Dimon, CEO JP Morgan Chase & Kirsi Larkiala, CEO Fintech Ecosystem Ltd @ Davos2020