Dimon warns of 'diminishing role' of incumbent banks

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April 9, 2022

Dimon says growing competition is weakening banks' financial roles

In his annual letter to shareholders, JPMorgan Chase CEO Jamie Dimon warned that incumbent banks are grappling with a "diminishing role" in the global financial system, largely due to outside competition.

Dimon argued that the relative influence of big US banks has tumbled, comparing 2010 data with 2021 data. He also called out some competitors by name, like Walmart, Apple, and Vanguard.

The CEO also blamed regulations for hampering banks' competitiveness. For example, he noted that neobanks have avoided the Durbin Amendment in the US while garnering fees from debit card transactions.

Dimon defended the banking giant's tech spending, which some investors have privately criticized while seeking more details. His case for the spend is reasonable and provides greater context than initially reported cash outflows.

Insider Intelligence's Tom Auchterlonie has the full story.

BRIEFING HIGHLIGHTS

UK watchdog may step in to protect UK businesses from climbing card fees

The UK's Payment Systems Regulator (PSR) sent information requests to card networks after finding merchant fees have "increased significantly" in recent years, per the regulator's annual plan and budget.

Mana makes perks-filled neobanking play for gamers

Mana, a new US neobank, is launching with a focus on gamers that includes a slew of incentives to join.

Current's 'hybrid' DeFi approach could help win over younger customers

US neobank Current plans to incorporate elements of decentralized finance (DeFi) into its consumer-focused lineup by rolling them out on a "hybrid finance" basis, per an American Banker feature.

PayPal revamps credit card to support user engagement push

PayPal refreshed its Synchrony-issued PayPal Cashback Mastercard with expanded rewards, per a press release.

Three fintechs improving SMB payments and cash flow

Three companies announced new solutions that streamline payments for small and medium-sized businesses (SMBs), focusing on cash flow and invoice automation.

Canadian neobank jumps into investing with alternative assets focus

Neo Financial, a Canada-based challenger bank, is entering the wealth management space with an offering that will let ordinary investors access alternative assets.

Wells Fargo, BofA among banks eyeing Zelle for retail to address open banking disruption

Wells Fargo and Bank of America are reportedly among banks considering a plan to enable Zelle for online retail payments at big merchants, per the Wall Street Journal.

Bolt's crypto acquisition highlights the need for one-click checkout differentiation

One-click checkout provider Bolt acquired cryptocurrency startup Wyre Payments in a deal reportedly valued at $1.5 billion, people familiar with the matter told the Wall Street Journal.

Big banks work together to get their own ID verification service

Seven major US banks are backing a new identity verification service, Authentify, which is designed to make it easier for consumers to give their information to businesses.

RESEARCH IN FOCUS

Small-Business Payment Disruptors

The combination of increasing payment and operational digitization and rising merchant services satisfaction among small and medium-sized businesses (SMBs) is forcing banks, acquirers, and fintechs to evolve their offerings. Based on data and interviews with key industry figures, we evaluate the major groups of providers competing to serve small businesses, examine wholesale changes in the approach to SMB merchant services, identify specific areas of investment set to dictate innovation in 2022, and spotlight best practices for payment service providers (PSPs).

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Super Apps in Banking

Consumers' growing time spent with mobile and their overwhelming choice of products and providers are driving demand for rebundling in financial services. Super apps are emerging as the solution to meet this demand and improve the digital customer experience. Banks must start deciding today how to engage in the super apps trend to stay relevant to consumers. In this report, we explain how super apps will transform the digital customer experience, examine the disruptors banks will face when entering the super apps market, and lay out strategies banks can use to navigate the rise of super apps.

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US Neobank Emerging Features Benchmark 2021

Neobanks' breakneck customer growth poses an unavoidable threat for incumbents: The four largest US neobanks by user count will together boast approximately 34.0 million customers by 2025. This benchmark highlights the most in-demand mobile banking features that an incumbent, fintech, or neobank can offer to attract, retain, or monetize users. It evaluates neobanks across seven categories and weights their scores according to the results from a survey of US mobile banking users. The findings pinpoint product development priorities for mobile banking.

Get the full report →