JPMorgan Chase could soon open its own digital payments bank in the UK, according to sources.
The news was broken by Sky News, which suggested that JPMorgan Chase and Co. can soon enter the UK consumer banking market in the upcoming months. The basis was of the news was the recent talks of JPMorgan with regulators regarding the approvals for starting their own digital payments bank. The digital bank would operate under its Chase brand. Furthermore, Financial Times further suggested that Clive Adamson (non-executive director, JPMorgan Securities LLC) will be the head of this initiative.The consumer banking market in the UK is already seeing huge growth. The likes of Monzo Bank and Starling Bank have successfully gained millions of consumers who were looking for an alternative of the established banking giants like HSBC Holdings and Barclays. JPMorgan would want to encash this market; however, its path will not be easy. For one, it will have to directly compete with another giant, Goldman Sachs Ltd. Goldman has been planning to soon expand its online-only banking service Marcus further in the UK.
But another potential issue will be the market saturation itself. Despite its huge growth and great potential, the consumer banking market is also rapidly filling with the competition. Recently, German digital bank N26GmbH closed its operations in the UK after 4 years. While the official reason has cited Brexit, many experts suggested that the bank could not face stiff market competition. Another German digital bank, Fidor, too closed its UK operation last year.
How JPMorgan would fare at the face of such competition is something to watch out in the future.