By Oliver Smith on Tuesday 19 January 2021
Jamie Dimon believes his bank should be "scared shitless" by fintech.
Jamie Dimon made headlines on Friday as the outspoken CEO of JP Morgan Chase warned that his bank should “be scared shitless” of fintech during an earnings call.
The whole call is worth a listen, but if you want to skip all the jargon, then jump to 1:25:00 where the conversation focuses on fintech and especially the industry’s high valuations.
“I do agree with you,” says Dimon, responding to an analyst’s question. “I gave to the management team, my whole operating committee, a little deck that showed Visa $500bn, MasterCard $350bn, PayPal $220bn, Ant Financial $600bn, Tencent $800bn, Alibaba a trillion dollars, Facebook, Google, Apple, Amazon, you can go on and on, but absolutely we should be scared shitless about that.”
When asked how JP Morgan would be responding to the threat, Dimon replied:
“I’m not gonna tell you. But we have plenty of resource and plenty of smart people, we’ve just got to get quicker, better and faster which we are.”
“If you look at what we do, you’d say we’ve done a great job, but other people have done a good job too. Some of them are monopolies virtually... which is another issue.”
His “monopolies” comment came after an earlier tirade about “unfair competition, which we will do something about eventually”.
“People who basically don’t do KYC, AML and create risk for the system. That part, we will be a little more aggressive on. People who improperly use data that’s been given to them, like Plaid. You can expect there will be other battles that take place here.”
When asked about JP Morgan’s chances against the rising fintech threat, the CEO concluded:
“It’s going to be very tough competition over the next ten years. But I expect to win, so help me God.”
According to CNBC, Plaid CEO Zach Perret declined to comment directly on Dimon’s allegation, and a spokesperson for the company said: “data privacy and security are core to everything we do, including the data exchange agreements we have with JPMorgan Chase among many other banks.”
For any Europeans reading Dimon’s comments, the JP Morgan CEO’s logic appears entirely backwards.
What does “improperly use data” in an Open Banking context even mean?
Indeed this has more to do with how Open Banking developed in the US, where banks chose to grant access to ‘their’ customer data and ‘allowed’ the likes of Plaid to exist.
Now that Plaid and its fintech peers are poised to dwarf Dimon’s bank, it’s obvious where the regrets and retaliation are coming from.
Contrast this to Europe, where PSD2 and other regulation gave consumers more control over their own data and empowered a new generation of businesses.