JPMorgan is trying to advance its master plan for global fintech domination with a discipline that is often lacking in a sector better known for wildly over-promising than actually delivering practical solutions.
Almost two weeks after launching JPM Coin, a digital token that will use blockchain technology to make payments, the bank held its investor day in New York on February 26 and promoted the new venture within a presentation designed to highlight its dominance in corporate and investment banking.
There is no question that JPMorgan has established itself as the leading global investment bank in the years since the 2008 financial crisis. It has been number one for global investment banking fees for 10 consecutive years and recently increased its share of fixed income and equity markets revenue more than any other bank.
This provides no guarantee of future success as the finance and technology sectors collide in the coming years, but JPMorgan was keen to project an air of inevitability when it promoted digital initiatives at its investor day.
It highlighted that JPM Coin is the first digital coin from a US bank and updated the number of banks that have signed letters of intent for its interbank information network at over 185.
Looking ahead, JPMorgan predicted that this network would soon “reach ubiquity” with more than 200 banking partners, which seems to imply that competitors would be wasting their time with any rival initiatives.
There is actually considerable debate over how JPM Coin will be adopted and where blockchain technology will be usefully implemented, as Euromoney’s Peter Lee points out in his column. And JPMorgan’s marketing of its fintech plans has been complicated by the remarks of its chief executive Jamie Dimon about cryptocurrencies through the years.
Dimon’s free-wheeling approach to public comments is a refreshing contrast to most other bank heads, but his condemnation of bitcoin as a fraud and his changing stance on whether JPMorgan would facilitate cryptocurrency trading has made life challenging for fintech executives at the bank.
Managers such as Umar Farooq, JPMorgan’s head of digital treasury services and blockchain, no doubt put their own pronouncements through extensive peer group testing before they make any public statements.
Dimon might not be following every step of the promotion of JPM Coin, but you never know, and every JPMorgan employee understands that there is only one outcome when a manager displeases the longest-serving chief executive on Wall Street. This could hold back the digital marketing drive.
Farooq has the sort of background you might expect from a fintech manager, including multiple degrees from MIT and Yale. He does not have the personal brand recognition that is ideal for a marketing push, however.
There is one executive who would seem to fit the bill for a promotional initiative that might help JPMorgan to reach digital ubiquity, in the form of Blythe Masters.
She recently stepped down as chief executive of Digital Asset, where she had been the highest-profile promoter of the uses of distributed-ledger technology within finance.
And she has extensive knowledge of the workings of JPMorgan – and the whims of Dimon – after a 27-year career at the bank that involved a lead role in the development and marketing of credit derivatives and later a job as global head of commodities.
Sadly, Euromoney understands that Masters will not be making a comeback to JPMorgan that would guarantee extensive publicity for its drive for digital domination. The voyage to fintech ubiquity and beyond by the bank will instead have to be made by lower-profile managers.
Perhaps that makes sense for what will be a steady grind to persuade customers and rival banks to adopt JPM Coin and related blockchain initiatives, even if it does not help when it comes to eye-catching marketing.