Jamie Dimon’s UK retail banking game has a bad run
This is Reuters A week ago:
Wall Street giant JPMorgan plans to double the size of its workforce at young British retail bank Chase to at least 2,000 within two years, the firm’s CEO told Reuters, despite losses and investor skepticism.
JPMorgan said it has attracted one million customers and more than £10 billion ($10.8 billion) in deposits to its UK mobile app bank since its launch last September.
And here’s This Is Money (MailOnline’s acceptable personal finance face) today:
Chase Bank left customers in limbo after its app crashed, leaving up to 1 million users without access to accounts.
The banking-only app provider has experienced a major outage since lunchtime yesterday, preventing customers from logging in.
Chase, which currently serves more than a million UK banking customers, says it is “working around the clock to resolve the issue”.
In an email to clients on Wednesday afternoon, chillingly titled ‘An update on our services’, British Chase chief Sanjiv Somani addressed the hordes of frustrated interest rate scammers (the words every customer wants to hear underlined by us):
As of Monday evening, we are experiencing intermittent issues with one of our systems. . .
I know this is not what you expect from your bank and I’m sorry for the inconvenience. I want to make sure your money is safe and we will do everything possible to ensure that you are not adversely affected by this issue.
The status page is pretty ugly (sample from shortly before pixel time below):
The FT has previously reported on the skepticism Chase UK has sparked among investors, who have dared rare criticism of JPMorgan boss Jamie Dimon over the decision to enter the hyper-competitive UK market.
Alphaville has also written about the existential crisis surrounding a similar venture. Marcus, the Wall Street consumer credit platform Category-V Goldman Sachs bank, launched an equally competitive interest rate, back when claiming to have been paid any kind of interest was in a “Sure Grandpa” category of folk tales.
This sort of multi-day outage is quite embarrassing for a service trying to position itself as a fully-fledged alternative to the main UK bank account providers.
But people have always wondered why JPMorgan operates even in the restricted UK market. It’s a Paul Davies from Bloomberg had an interesting response earlier this year:
[…] Chase UK is generally not for the UK. Its importance will be that of a laboratory — a testing ground for infrastructure, technology, products and ideas. What JPMorgan learns there can be used to modernize its main Chase US retail bank and form the basis of a series of digital-only offerings elsewhere. Chase UK is ground zero for an international consumer business…
Experimenting like this in a dynamic but – for JPMorgan – relatively inconsequential market is much safer than doing so where millions of American customers rely on Chase running smoothly every minute of every day. Infrastructure that works in the UK can then be industrialized more quickly in the US. And what doesn’t work can be quickly and easily abandoned.
here is another one recent Reuters article:
JPMorgan plans to hire a team of retail bankers in Germany as the biggest US lender prepares to expand its international consumer business in search of more stable revenue streams.
Assuming that Davies’ thesis reflects thinking at the 383 Madison Avenue, Alphaville can only hope, for the sake of our German readers, that Chase finds out what went wrong here. We would hate for you to be inconvenienced.