JPMorgan Chase & Co is planning to enter the UK consumer-banking market in the next few months, offering a range of savings and loan products under its Chase brand, Sky News reported, citing unidentified sources.
The Wall Street stalwart has been in discussions with regulators about securing the necessary approvals to operate in UK personal banking, Sky said.
The new service would probably debut later this year and an unnamed JPMorgan executive is helming the project.
A JPMorgan spokesperson declined to comment.
New York-based JPMorgan would be jumping into a consumer-banking market that is in a state of flux. Financial technology (fintech) players, such as Monzo Bank Ltd and Starling Bank Ltd, have attracted millions of customers looking for alternatives to the traditional institutions, such as HSBC Holdings PLC and Barclays PLC.
The prospective launch could also pit JPMorgan against Goldman Sachs Group Inc’s online-only bank called Marcus, which opened in the UK in September 2018, though a City of London source told Sky that JPMorgan was planning a wider range of products.
Marcus, which offers savings accounts, is expected to add more services as it steps up its presence in the UK.
In the UK’s booming fintech sector, mobile app-based “neo-banks,” such as Revolut, Monzo and Starling, have established themselves as plucky upstarts.
However, fierce competition might already be taking its toll. Last week, N26 GmbH, a German digital bank backed by investor Peter Thiel, announced that it was withdrawing from the UK after four years.
The traditional banking sector, which is still reeling from the 2008 global financial crisis and a string of product misselling scandals, retains a strong grip on personal banking, experts have said.
However, Warwick University’s Andreas Kokkinis, who specializes in corporate law and financial regulation, told reporters that fintech was gaining a foothold.
“The six biggest UK banks have 87 percent of the market share for current accounts, so the remaining 13 percent is split amongst smaller conventional banks and building societies, and challenger banks,” he said.
“In that sense large universal banks — HSBC, Barclays, Lloyds Banking Group, Royal Bank of Scotland Group and Santander UK — retain their dominance over UK retail banking market,” Kokkinis said.
“However, challenger banks, which operate exclusively online and thus offer cheaper services, are popular amongst customers below the age of 37,” he said.
If current trends persist, “the market share of challenger banks will grow significantly in the near future,” which could lead to takeovers, Kokkinis added.
“This does not necessarily mean that large banks will lose their dominant position in retail banking markets... What is more likely to happen is that large banks will acquire successful challenger banks,” he said.
Additional reporting by AFP
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