JPMorgan Chase Embraces FinTech (For the Most Part)
As Inside Sources recently noted Chase has been taking steps to integrate financial technologies into their banking operations. In some ways this is just an attempt to keep up to speed and maintain their enormous customer base. For example the bank announced that they would be entering the quickly-growing mobile payments field with Chase Pay sometime in 2016. Announced late last year, Chase Pay will allow customers to complete transactions by displaying a QR code on their phone to be scanned.
Although Chase is attempting to increase their technology in-house, they’ve also looked to the aforementioned Silicon Valley for some help. Perhaps the biggest example of the bank embracing FinTech is their partnership with online small business lender OnDeck. Through their arrangement Chase small business customers can apply for loans using the OnDeck system. However instead of the loans actually being fulfilled by OnDeck, the lender simply provides the processing for the bank.
Despite partnering with some FinTech companies, Chase has also sparred with others. Last year the personal finance app Mint took issue with the bank after customers complained that they could no longer access their Chase accounts from the app. The bank claimed this was a security and privacy measure arguing that, in the event of a breach, Chase would likely be held liable. Whether the move was justified or not it still left a bad taste in mouths of app users and FinTech enthusiasts (to be fair Chase wasn’t the only bank to disallow their data from being accessed on Mint).
Instead of allowing customers to use aggregating apps for their banking Chase is working to improve their own. In a world where mobile deposits are no longer just a novelty but a must-have for many consumers, Gavin Michael, the head of digital for the bank, says the company is not only competing with other banks but with other applications. “Consumer expectations are being set across the board,” he told Inside Sources.
When asked about Silicon Valley and FinTech startups, Michael said, “This is really about how we use each other’s expertise and resources.” In that aspect Chase isn’t the first to realize that banks and FinTech firms can compliment each other but they may be striking new ground in actually making that happen. Overall Chase has shown that, even if they can’t keep up with technology on their own, they’re willing to work with those who can. While there have been and surely will be a few more bumps in the road, the bank is a prime example of what it will look like when traditional banking and FinTech finally shake hands.