This $11 Billion Tech Investment Could Disrupt Banking
JPMorgan Chase invests $11 billion per year on technology. Here’s why.
There are two kinds of corporations emerging from today’s technology revolution: the disrupted and the disruptor. JPMorgan Chase is in the midst of a once-in-a-generation transformation into the latter.
Silicon Valley may dominate the headlines, but it isn’t the only player in the emerging technology game. Being large and well established can be a burden for many companies, especially in industries swarming with nimble tech startups. But in the world of financial technology, it’s a blessing. Because developing cutting-edge technology is one thing; building a critical mass of loyal customers, and enough scale to fine-tune best-in-class products is quite another.
JPMorgan Chase is already there, with more than 60 million retail customers whose preferences help the company drive innovation and accelerate transformation.
"We have a tremendous amount of opportunity here," says Larry Feinsmith, Managing Director and Head of Global Tech Strategy, Innovation & Partnerships at JPMorgan Chase. "While other tech companies have a narrower scope of things they do very well, what differentiates JPMorgan Chase is our ability to invest $11 billion dollars in a broad number of technologies simultaneously. Our size and scale are simply unparalleled."
Feinsmith is referring to the $11 billion investment JPMorgan Chase spends a year to fuel a team of 50,000 technologists. The company also recently invested in partnerships with high-profile startups, including OnDeck and Roostify to the tune of $600 million.
Perhaps the most surprising aspect of this seismic shift is that it is not new at all—it is part of a continuous business evolution. Customers have become accustomed to the fast pace of innovation and as such, banks such as JPMorgan Chase continue to push the limits in tech applications."
Machine Learning Is Not Just a Buzzword
As consumers become accustomed to personalized applications, they are beginning to expect similar tailored services in other parts of their lives. Large companies, such as JPMorgan Chase, are learning from their data to surface the content, application, or services most relevant to their clients.
For example, J.P. Morgan’s Corporate & Investment Bank uses machine learning to personalize the digital experience of its research platform, J.P. Morgan Markets. The platform produces over 10,000 pieces of research a year, but until recently, clients did not always know the reports existed. Machine learning techniques solved the issue, and now each client logs into a customized portal that provides unique and relevant research, personalized to their needs.
Artificial Intelligence Is Here to Stay
You can’t be a leader in any industry without engaging customers, clients, and employees in new and unexpected ways—and artificial intelligence is one of the most powerful tools companies are using to harness this enthusiasm.
JPMorgan Chase is the first major bank to roll out an AI-powered virtual assistant that will make it easier for corporate clients to move money around the world, whether it's for routine payroll or multi-million-dollar mergers and acquisitions. AI allows for a multi-channel, consistent customer service experience that gives consumers the power to ask the virtual assistant for information, such as balances, on demand. Machine learning allows the AI-powered assistant to adapt to the clients' behavior over time and make insightful recommendations. If a customer authorizes multiple wires in a given period of time, the virtual assistant could say: "Looks like you have sent 100 U.S. dollar wires to Singapore. Do you know you can send a foreign exchange ACH payment instead? Click here to sign up."
Eventually, AI-powered virtual assistants will be integrated into all areas of the bank to deliver value to customers. They can also streamline internal operations to save employees’ time by answering routine questions such as "Did my trade go through?" and "How can I reset my password?"
Staying Ahead of the Blockchain Revolution
For several years blockchain has been at the forefront of technologists’ minds. But could it also change the way we interact beyond payments?
"We're actively exploring applications of blockchain technology across all of our lines of business," says Feinsmith. "We believe blockchain technology can be a game changer in terms of process optimization, improved client experience, and the creation of new revenue streams."
Feinsmith and JPMorgan Chase have been working on a number of blockchain projects that explore concepts beyond cryptocurrency. One of those projects is Quorum, an ethereum-based, enterprise-focused platform built with open-source code. The platform combines enterprise-strength software with high-level compliance for the processing of private transactions. Its rapid adoption by developers has solidified the significance of players like JPMorgan Chase in the blockchain ecosystem.
The Future of Tech is Calling
Technology, especially in consumer-facing businesses like banking, is changing quickly to meet consumer demands and market trends. Large corporations are on a never-ending cycle of iteration to rollout of smarter, faster, and easier to use apps, virtual assistants, cybersecurity systems, digital platforms and distributed ledger technologies.
JPMorgan Chase has a clear view of the future, which is why its technologists work on a variety of other solutions, including mobile and electronic payments, big data, cybersecurity and cloud computing. As a result, the company is now competing with top-tier tech giants for consumer attention and employee talent.
"We are an unexpected disruptor in banking and in the technology industry," said Feinsmith. "Because technology changes so quickly we are not only developing technology for today, but we are also anticipating the technology needs of our consumers 5-10 years down the road."
Interested in helping JPMorgan Chase develop solutions to real-world problems? Learn more about the variety of technology career opportunities at JPMorgan Chase & Co.