JPMorgan Chase announced plans today to move its core retail banking system to a new cloud-based system developed by Thought Machine, according to American Banker.
UK-based Thought Machine was founded in 2014 by former Google Engineer Paul Taylor, and currently sells its cloud-based Vault core system to banks and financial institutions looking to evolve from legacy platform technology.
JPMorgan is adopting the Vault cloud platform in order to meet quickly changing customer demands, according to JPMorgan Chase Chief Product Officer Rohan Amin. He says the large New York-based mega-bank chose Thought Machine because it improves scalability and reduces breakages, uses APIs to help Chase move towards embedded banking, enables a range of consumer products on a single platform, and can run core retail banking in real time.
“We looked very hard at our core banking system and capabilities. We looked at the market, looked at our internal capabilities and came to the conclusion that working with Thought Machine was the best path forward for us,” Amin said.
Thought Machine CEO and co-founder Taylor says that the company’s platform has a universal product engine and is properly cloud native, meaning that all retail banking products can run on a single platform and do not need to be transitioned or re-worked to the cloud.
“Instead of just having these siloed systems — one for mortgages, one for credit cards — we can run all the products of the retail bank and even parts of the corporate bank on a single platform. It’s not for us to say what the bank products should be, that’s up to the bank, but we always want to make sure that we can deliver on that,” Taylor said.
A rise in acquisitions
JPMorgan also announced acquiring college planning platform Frank yesterday, a platform that helps students apply for and negotiate financial aid, in an attempt to increase relationships with students and parents, according to CNBC.
The company’s online portal platform has served over 5 million students at 6,000 institutions, but it looks like the acquisition’s main purpose is to generate loyalty among specific demographics. The company also recently purchased restaurant review service The Infatuation, which owns Zagat, in a yet-to-be-explained attempt at gaining favor with customers.
Last year, JPMorgan Chase CEO Jamie Dimon’s stated that the largest bank in the US by assets would “be much more aggressive with acquisitions” at the 2020 annual investor meeting, according to CNBC.
The Infatuation and Frank make up the bank’s second and third acquisitions since then, showing a rise in volume compared to the past. This marks only the second time JPMorgan has acquired more than one company in a calendar year, following purchases of Xspand, Bear Stearns and Washington Mutual in 2008.
Outside of the US, JPMorgan Chase & Co is currently being investigated by Brazilian authorities for participation in an alleged bribery and money laundering scheme in 2011 involving state-run oil company Petrobas, according to Reuters.
According to the report, JPMorgan purchased approximately 300,00 barrels of Petrobas fuel oil and Brazilian federal police are investigating whether or not the bank routed bribe payments to employees on Petrobas’ trading desk in order to purchase fuel at artificially low prices. No charges have been brought up in the probe.
In other recent fintech news, PayPal’s “super app” officially launched, integrating new features such as savings accounts and crypto trading. The US Treasury also set a 99% electronic payments target for 2030, alongside other goals intended to help secure and digitize existing government payment infrastructure.