Banking Briefing: JPMorgan zeroes in on landlords with new payments platform
- With its new payments platform, JPMorgan Chase is zeroing in on property owners.
- Meanwhile, banks and fintechs alike are turning to layoffs to keep afloat.
JPMorgan Chase has once again stretched its fintech arms – this time focusing on rent.
The bank recently released a new platform it’s calling Story, which lets property owners and managers automate invoicing and receipts of online payments.
The bank’s goal with this platform is to cut out the age-old use of checks in rent payments (I don't know about you, but the first thing I thought about when I read this story was this SNL skit).
According to the firm’s research, about 78% of property owners still rely on checks to get their payments, as well as outmoded software like Microsoft Excel to manage their payments.
Story is meant to make these payment processes more digital, as well as allow property owners to gain insights by examining the payments data – like how high to set the rent, and where to make future property investments.
Another thing to note: you don’t have to be a Chase customer to use the platform.
The ‘why’ behind the ‘what’
Several software companies focusing on rent payment and property management have emerged in the past few years. The property management software market value is predicted to reach $2.59 billion by 2030 – up $1.56 billion since 2020. So...
🎵 What’s Chase got to do, got to do with it? 🎵
Well, in the spirit of real estate, JPMorgan Chase has been zeroing in on the best sectors to build its digital solutions in. And it’s not slowing down – the bank recently committed to spending $12 billion a year on technology.
And all this is happening while fintechs in the industry struggle to stay afloat in the face of the currently iffy financial climate.
More fintechs rely on layoffs to weather the current financial crisis
Speaking of staying afloat, stories have been surfacing these past few weeks about fintechs turning to layoffs to keep their businesses alive.
Last week, a story came out that Chime was planning to cut 12% of its 1,300 person workforce in an effort to weather the current market.
The news could reveal quite a bit about what’s happening in the digital banking space right now – especially considering Chime’s long-lasting reputation as a star among its competitors:
- In 2020, the digital bank beat Robinhood as the top-valued fintech with a valuation of $14.5 billion.
- It was the most downloaded app in Apptopia’s list of top digital banking apps – both in the first half of 2021 and the first half of 2022.
Chime’s not alone. You may recall earlier this year that Varo laid off 75 employees – 10% of its staff – following the regulatory filings that revealed the bank could be on its way to running out of funds.
It’s not just digital banks either. Here are some other fintechs that have been making workforce cuts in the last week alone:
- Just a day after the news about Chime, Stripe came out with the announcement that it would be firing 14% of its workforce – amounting to around 1,020 employees.
- On November 1, Upstart said it was letting go of 7% of its workforce – around 140 employees.
- Also on November 1, Credit Karma, while not firing anyone, announced that it's freezing all hiring processes for now.
Don't think banks are immune to the job cuts, though
A drop in investing and dealmaking is leaving banks in a difficult position.
- With mortgage volumes slowing, lots of Wells Fargo employees’ jobs are at risk as their workload decreases, according to a recent CNBC article. The bank already began firing people back in April.
- Morgan Stanley is planning to make global cuts in the next few weeks in response to the slowdown in dealmaking.
- Deutsche Bank has already fired dozens of people in its investment banking division in response to the slowdown.
So, yeah, the days of competing for tech talent seem to have reached a halt for now…
What we’re consuming
Mixing money with emojis…
Revolut launches a chat feature, which means you can talk and transfer money all within the same app: “YOU OWE ME FOR THAT MILKSHAKE, KAREN!!” or something like that… (Fortune)
Not exactly a relaxing hike…
The Bank of England has raised its interest rate by three quarters of a point – the biggest hike in over thirty years. (CNN)
No more filling up on junk fees!
With inflation leaving several US citizens with dried up savings, Biden wants to crack down on banks’ reliance on what are being dubbed ‘junk fees’. The hope is to save consumers $3 billion a year. (Fortune)
Why you can’t just count on account opening
Digital account opening in the US for neobanks is predicted to decrease by over 40% this year – leaving the future of digital banks just a tad blurrier. (Insider Intelligence)
What we’re producing
Power of Payments Ep. 17: Breaking down B2B BNPL with Resolve’s Chris Tsai
How fintech apps help consumers weather economic challenges, in 4 charts
Tearsheet’s Money 20/20 takeaways
Anchorage Digital’s Diogo Monica on keeping up with regulations and linking FIs to digital assets
Inflation makes a woeful entry into consumers’ budgets this holiday season
The Green Finance Podcast Ep. 12: How do we make investments green, without going into the red?
Where Credit’s Due Ep. 11: Unpacking the CFPB’s BNPL report with Marshall Lux
How Wells Fargo and Google Cloud AI are scaling up the bank’s digital offering with ‘Fargo’
Tearsheet Podcast: WTF is Software Defined Networking with IBM’s Andrew Coward