JP Morgan Chase 2015 Annual Report Download - page 32

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originationsystemthatwillsetanew
industrystandardforclosurespeedand
customerservice.
Yes, we are always improving our economies
of scale (to the ultimate benefit of our clients).
And yes, over time, banks have been enormous
innovators.
Wecommonlyhearthecommentthatabank
ofoursizecannotgenerateeconomiesof
scalethatbenettheclient.Andweoften
hearpeoplesaythatbanksdon’tinnovate.
Neitherofthesecommentsisaccurate.Below
Igiveafewexamplesofthelargeandsmall
innovationsthatweareworkingon:
• Consumer and small business banking
accounts.Manydecadesago,bankaccounts
meantchecksandamonthlystatement,
withfewadditionalbenetsprovidedto
customers(otherthanmaybeatoaster).
Today,mostcheckingaccountscomewith
manybenets:debitcards,onlinebillpay,
24-houraccesstoonlineaccountinforma-
tion,fraudalerts,mobilebanking,relevant
rewardsandATMaccess.
• ATMs. Today,ATMsareubiquitous(we
havealmost18,000ATMs,andour
customerslovethem).TheseATMshave
gonefromsimplecashdispensersto
state-of-the-artservicecenters,allowing
customerstoreceivedierentdenomina-
tionsofbills,acceptdepositedchecks,pay
certainbillsandaccessalltheiraccounts.
• The cost and ability to raise capital and buy
and sell securities. Thirtyyearsago,itcost,
onaverage,15centstotradeashareof
stock,100basispointstobuyorsella
corporatesingle-Abondand$200,000
todoa$100millioninterestrateswap.
Today,itcosts,onaverage,1.5centsto
tradeashareofstock,10basispointsto
buyacorporatesingle-Abondand$10,000
todoa$100millioninterestrateswap.
Andmuchcanbedoneelectronically,
increasinglyonamobiledeviceandwith
mostlystraight-throughprocessing,which
reduceserrorratesandoperationalcosts–
forbothusandourclients.Thesecapa-
bilitieshavedramaticallyreducedcosts
toinvestorsandissuersforcapitalraising
andsecuritiestransactions.
• Cash management capabilities for corpora-
tions.Itisimpossibletodescribeinafew
sentenceswhatcompanieshadtodoto
movemoneyaroundtheworld40years
ago.Today,peoplecanmovemoneyglob-
allyonmobiledevicesandimmediately
convertitintoalmostanycurrencythey
want.Theyhaveinstantaccesstoinforma-
tion,andthecostisafractionofwhatit
usedtobe.
FinTech and innovation have been going on my
entire career — it’s just faster today.
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
dierentangles.WhilemanyFinTechrms
aregoodatutilizingnewtechnologies,we
shouldrecognizethattheyareverygood
atanalyzingandxingbusinessproblems
andimprovingthecustomerexperience(i.e.,
reducingpainpoints).Sometimestheynda
waytoprovidetheseservicesmoreeciently
andinalesscostlymanner;forexample,
cloudservices.Andsometimestheseservices
arenotlessexpensivebutprovideafasterand
simpliedexperiencethatcustomersvalue
andarewillingtopayfor.Youseethisin
someFinTechlendingandpaymentservices.
ItisunquestionablethatFinTechwillforce
nancialinstitutionstomovemorequickly,
andbanks,regulatorsandgovernmentpolicy
willneedtokeeppace.Serviceswillberolled
outfaster,andmoreofthemwillbeexecuted
onamobiledevice.FinTechhasbeengreatat
makingiteasierandoftenlessexpensivefor
customersandwilllikelyleadtomanymore
people,includingmorelower-incomepeople,
joiningthebankingsystemintheUnited
Statesandabroad.
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