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"Culture" and a "great hook" crucial to success of JP Morgan's purchase of Nutmeg

A trio of fintech experts offered their opinion on whether the American banking giant would make a success of its purchase of digital wealth manager Nutmeg.

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JP Morgan Chase's acquisition of British digital wealth manager Nutmeg is likely to be successful if the US banking giant recognises the importance of culture and can offer potential customers a “real hook”, experts have said.

Last week, JP Morgan Chase struck a deal worth almost £700 million to buy Nutmeg, as America’s biggest bank seeks to kickstart plans to build a consumer business in the UK.

Commenting on the deal at AltFi’s Festival of Finance, Craig Fox, vice president and director of fintech at Silicon Valley Bank, said that based on history “the odds maybe be against it” but money is “kind of the one equaliser”.

“I do think, people genuinely don’t change banks for fun. And so I think there has got to be a real hook,” he added.

Speaking alongside Fox on the panel, David Brear, CEO of fintech consultancy 11:FS, offered a cautious assessment, but said it could be a winning deal.

He said it “was difficult to tell” if it would be a success, pointing to the example of RBS axing its digital bank Bó as a note of caution.

“I think it’s going to be interesting. Can JP learn from really players like BBVA who have bought things and not left them alone enough to continue being successful?

“Hopefully for the Nutmeg team it’s very hands off in terms of what they are looking to achieve.”

He added the deal has a “decent shout” of being successful if JP Morgan were to prioritise technology and culture as being crucial factors.

“I mean they have got, theoretically, more money than God, so you would think they would be able to make this work.”

But he added that “the secret sauce is often culture”.

Also on the panel was Iana Dimitrova, CEO, OpenPayd, who said the deal validates that the “digital economy is growing “ and the “need for good digital banking services is growing as well”.

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