An internal JPMorgan memo reveals that the lender plans to invest $9 billion in technology like robotics and the blockchain, according to Business Insider, which claims to have seen the memo. Daniel Pinto, the head of JPMorgan’s corporate and investment bank, sent the memo, which claims a major priority is to pursue innovative technologies in which they have been investing.
Internal working groups have made “significant advances” and will receive additional freedom to create marketing leading platforms in the next year, the memo states.
JPMorgan also has established teams for robotics, blockchain technology and big data applications, according to the memo.
JPMorgan is one of several major financial institutions exploring blockchain technology. The block chain can record, regulate and enable transactions in ways that alleviate some of the tasks currently required for transactions.
When paying someone in pounds, for instance, a bank needs to contact someone from another bank and advise them to update the balance. At the end of the day, transactions move between banks through an intermediary to ensure everyone has the proper amount of cash.
The blockchain eliminates most of those steps; one party simply pays the other party’s digital wallet.
JPMorgan became one of the first banks to join the R3 partnership, a banking industry startup seeking to develop industry-wide standards and use cases for the blockchain.
The Linux Foundation recently announced a collaborative initiative to promote blockchain technology with JPM’s involvement.
Pinto, in his note, gives thanks and appreciation to employees and says the company in 2015 evolved alongside the banking industry’s momentous transformation, which it accomplished by growing its investment in technology.
The company has invested in Prosper, a peer-to-peer lender, Square, a payment startup, and others.
Pinto’s comments were consistent with those by Jamie Dimon, CEO, who told the Fortune Global Forum in June that blockchain technology could be used to transport currency in the future, even though he does not see a future for virtual currencies, CCN.com reported. Dimon is one of several financial executives who sees a future for the blockchain but not bitcoin. He said there “will be no real non-controlled currency in the world” and called bitcoin “a waste of time.”
In his annual letter to shareholders in April, Dimon noted that “Silicon Valley is coming” and banks need to catch up or be taken over by tech companies. He noted there are hundreds of startups working on traditional banking alternatives.
The startups that get the most attention are those in the lending business, in which firms can lend money to individuals and small companies quickly and effectively by using big data to strengthen credit underwriting, the letter continued.
These startups are good at reducing “pain points” since they can make loans in minutes instead of weeks, Dimon noted. He said the company must work hard to make its services as competitive and seamless as the startups’. He said they are comfortable partnering where it makes sense.
Also read: Patrick Byrne is wary of R3’s blockchain consortium
Anthony Jenkins, an ex-Barclays CEO, said earlier this year that banks face an “Uber moment” and could shed head count by as much as 50 percent. He said 11 big banks have cut a combined 10% of their staff this year.
A Financial Times analysis indicated banks eliminated nearly 100,000 jobs this year or 10% of the combined staff of the 11 major U.S. and European banks that announced cuts. Much of this was on account of less client activity and stricter regulation.
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Last modified: March 4, 2021 4:46 PM