When it comes to fintech, the CEO and Chairman of the US’s largest bank by assets is very vocal. JPMorgan’s Jamie Dimon frequently hits the road to visit startups in Silicon Valley, he’s hitting the podcast circuits to talk fintech, and he dedicates a lot of ink in his firm's yearly investor communications to discussing the future of finance. Dimon’s always happy to talk about fintech and he’s outspokenly encouraging and critical of the industy. In Dimon’s world, fintech isn’t really anything new. During his banking career, technology has always played a major role in creating new products, reducing costs, and providing a better consumer experience. But as CEO, it’s his job to understand exactly what advantages fintech is bringing to the financial ecosystem and then partner, build, or buy his way to bring these new technology to his current and future clients.
Fintech, Silicon Valley, and Incumbent BanksKara Swisher does a good job getting Dimon to open up on her Jamie Dimon's interview on Recode Decode , though when you listen to the audio, he tries hard to stick to his talking points. Dimon isn't in the Valley to mess shit up; instead, he's there to make peace, to identify promising technology, and to partner. Sure, fintech's a threat for incumbent financial institutions but in Dimon's world, everyone can find a way to work together. On traveling to tech hubs like Silicon Valley:
- "I come [to Silicon Valley] all the time and so does much of our management. We use these trips to learn about what’s keep our people a little bit scared, to make sure we learn how to use things things to better serve our clients."
- "I don’t buy that fintech is completely different. Technology has been changing the world since we invented agriculture. My whole business career technology has been a critical part of what a bank does. Fintech isn’t just about good technology but about solving business pain points."
- "I’m not nervous about fintech changing the way people are changing their banking habits but I think, in a capitalist world, it’s good that your business model gets attacked. I applaud that. That’s why we’re all here in Silicon Valley. Some of our businesses will be hard to attack — others will be easier to attack. Like payments. There are weaknesses in these systems that were built a long time ago."
- "I expect to win in payments."
- "There are downsides to flying — people die every now and then. Do you want to stop all air flights?"
Bloomberg's John Micklethwait's feature interview with Dimon[caption id="attachment_7560" align="alignright" width="255"] Cover artwork: Kelsey Henderson[/caption] Earlier in 2016, John Micklethwait saw with Jamie Dimon to conduct what turned out to be a pretty wide-ranging interview. The Bloomberg reporter questions the JPM CEO on his firm's role in the financial crisis, how the banking sector has (or hasn't) rebounded afterwards, fintech's role in the financial ecosystem, and how banking has evolved through Dimon's 30 year career. When asked if he thought banks were more moral than markets:
- "A bank is a relationship. I can’t desert you and expect to have a strong relationship afterward. If I told someone, “I know you’ve been buying milk from me and you need milk to survive. But the price is no longer $2 a gallon. It’s going to be $40 a gallon. I’m going to bankrupt you.” What do you guys think of me? You would hate us. I mean, obviously some of these banks did bad stuff. Yet even in the depths of the crisis, banks didn’t materially change the prices for clients."
- "Let’s look at lending, where they’re using big data for the credit side. And it’s just credit data enhanced, by the way, which we do, too. It’s nothing mystical. But they’re very good at reducing the pain points. They can underwrite it quicker using—I’m just going to call it big data, for lack of a better term: “Why does it take two weeks? Why can’t you do it in 15 minutes?”
- "For example, they might lend to one of our customers who’s got a $200,000 JPMorgan Chase loan, and this person wants to get another $20,000 for a new truck or a piece of equipment. And what does he do? He goes with them, because he gets it in 15 minutes. If he goes back to the bank, he may have to go through this whole big long process for that $20,000. Can we do something like that? Of course we can. I’ve asked our people, “Why don’t we just put a revolver on top of our basic loan?” Make it easier for the client."
An investor's perspective: Fintech and JPMorganIn his yearly missive to investors, fintech discussion has become kind of a regular column. It's within his periodic communication to investors [.pdf] that Jamie Dimon is at his most comfortable discussing the technological challenge to banking. It's also where he's at his most vulnerable, as the NYT's Ron Lieber recently took the bank CEO to task for some seemingly disparaging comments he made regarding fintech startups (comments that Dimon said were taken out of context). On banking's general appetite for new technologies:
- "If you look at the banking business over decades, it has always been a huge user of new technologies. This has been going on my entire career, though it does appear to be accelerating and coming at us from many different angles."
- "Many third parties sell or trade information in a way customers may not understand, and the third parties, quite often, are doing it for their own economic benefit — not for the customer’s benefit."