“Who owns the future?”
That was just one part of a response from the in-depth interview that JPMorgan Chase CEO Jamie Dimon did with Bloomberg Business, where the often outspoken banking giant executive gave his thoughts on the future of finance, how Silicon Valley is influencing The Street and the state of the global economy.
But, in that interview, he also pointed out some issues with Big Data, the future of financial lending and even pointed out what the biggest risks to payments are. And, of course, he dug into the subject of regulation — one that always seems to spark his strongest opinions.
So, what did Dimon have to say? Well, as always, a lot. But, to start, he talked tech’s role in evolving the financial ecosystem.
“We use technology to make it cheaper, better and faster for the client. And then, if you have the most flow, you can win. Now, having said that, Silicon Valley wants to take on this business. They think they see an opening,” Dimon said.
That led into some comments about Big Data and lending.
“Let’s look at lending, where they’re using Big Data for the credit side,” he said in the interview. “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?'”
He discussed the limitations that this places on a bank, since the new Silicon Valley companies are getting trendy because they’ve found a way to get loans into consumers’ hands faster, in ways banks haven’t.
“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.”
And that’s something he said JPMorgan could do — and perhaps should be doing — a better job of in terms of making it easier for the client, Dimon noted.
And on payments? He also talked about banks, digital technology and the risks for payment systems in this fast-paced innovation economy.
“If you ask me, the biggest risk will be in the payment systems,” Dimon said. “I think the banks are pretty good at using digital technology to make it easier for customers. We have 23 million customers who bank on their phones now. It will be a challenge for anyone to be better, faster, cheaper than us. But some people think branchless banks can compete, and that can prove true in some cases.”
Beyond that, Dimon also spoke about regulation, interest rates that banks face and how it can partner to keep relevant in the lending space (as it’s done with OnDeck). When asked about traditional banking services (equity, debt, deposit accounts), he also gave his views on the future of banking, saying: “For the most part, I think those things will still be taking place in the banking system, although some will maybe move on.”
As for what’s next? Dimon had plenty more to say.