The New York-based mega bank first unveiled plans to launch in the UK earlier this year, opting for digital-only services in lieu of building physical branches for the company’s first international expansion in its 222-year history, according to the Financial Times.
The digital bank, codenamed ‘Project Dynamo’ during its two year development, has been compared to Goldman Sachs’ digital bank product Marcus, which launched in the UK in 2018, according to FinExtra.
Although this expansion effort, which will initially offer checking accounts and a rewards program, is not expected to be profitable in the short term, JPMorgan international consumer division CEO Sanoke Viswanathan says the bank is in no rush and the plan is part of a larger strategic commitment.
“We will spend hundreds of millions before we get to break-even and get to a place where this is a sustainable business, and we’re not in a rush,” he told FT.
The bank also plans to launch personal loans, investments and mortgages in the future. JPMorgan has been preparing for the expansion efforts with a number of acquisitions, including the purchase of UK online wealth manager Nutmeg and San Francisco-based ethically-minded investment platform OpenInvest in June.
The national banking conglomerate will not only have to face competition from legacy institutions such as Barclays, but also a wave of UK digital banking fintechs which have seen rapid growth in the past year, including Revolut, Monzo and Starling.
The company also announced plans to buy a majority stake in Volkswagen’s online payments unit earlier this month.
In other recent fintech news, Credit builder Self Financial announced raising a $50 million Series E with the aim of helping sub-prime consumers build credit and savings. Foxquilt also raised $8 million to help customize insurtech for small- and medium-sized businesses.