US banking giant JPMorgan has tapped Clive Adamson, former Head of Supervision at the Financial Conduct Authority, to Chair the launch of a new UK digital bank, planned for later this year.
News of JPMorgan’s decision to tilt at the windmill of the UK banking sector broke over the weekend and follows the 2018 launch of Goldman Sach’s Marcus savings brand. According to the FT, JPMorgan plans a broader digital banking offering.
JPMorgan launched the Finn digital bank into the US back in 2018, but closed it a year later after failing to differentiate the service from its other retail offerings. Launching into the UK gives it more of a green field to play in, in terms of its own global presence, but a market that is filled with Brexit uncertainty.
The UK’s exit from the European Union in January was heralded by aggressive comments from the then Chancellor of the Exchequer Sajid Javid, who said that the UK would diverge from European rules and regulations – comments since echoed by the Foreign Secretary.
“There will not be alignment, we will not be a rule taker, we will not be in the single market and we will not be in the customs union, and we will do this by the end of the year,” said Javid.
As reported by Transform Finance, rumours are growing that the EU may undo many of the concessions it made to the UK during the 47 years of its membership – some of which apply to Financial Services.
Meanwhile, there are mixed signals about the health of the digital banking market in a new report from Accenture. According to the professional services company, the rate of customers opening accounts with digital banks fell in the second half of 2019.
However, there was some comfort in the report: growth still stood at 150 percent, down 20 percent from the first half of the year.
Tom Merry, MD of Accenture Strategy, said: “It’s still a phenomenal growth rate, so whilst it has dipped a little bit, most businesses in banking would bite your hand off for that kind of growth rate.”
- More than one in ten consumers (11 percent) now exclusively use ‘challenger’ banks instead of established high-street names. And in five years’ time, less than half of consumers will solely bank with traditional brands.
These were just two of the findings in a 2019 report, Technology and the New Banking Customer – European View, from electronics and enterprise systems giant, Fujitsu. The research was carried out in August last year among over 8,500 consumers in the UK, Germany, Spain, the Nordics, and Ireland.
Continental users are ahead of their UK counterparts, found the survey, with German consumers most likely to use a challenger bank for all of their financial needs (14 percent) versus just nine percent of British consumers.