The man who runs America’s biggest bank can’t stop worrying about Fintech startups.
In his annual letter to shareholders this week, JP Morgan CEO Jamie Dimon warned investors and those in the banking industry that “Silicon Valley is coming.”
Seven years ago, the world was shaken by the global financial crisis. And since then, our company has been dealing with extraordinary challenges as a result of that crisis.
“We have endured an unprecedented economic, political and social storm — the impact of which will continue to be felt for years and possibly decades to come. What is most striking to me, in spite of all the turmoil, is that our company became safer and stronger — and it never stopped supporting clients, communities and the growth of economies around the world.
I feel extraordinarily privileged to work for this great company with such talented people. Our management team and our employees do outstanding work every single day — sometimes under enormous pressure — while dealing with an extreme number of complex business and regulatory issues. The way our people and our firm are able to address our challenges and admit our mistakes while continuing to grow our businesses and support our clients fills me with pride.
“There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking,” Dimon wrote in the letter. “The ones you read about most are in the lending business, whereby the firms can lend to individuals and small businesses very quickly and — these entities believe — effectively by using Big Data to enhance credit underwriting.”
Dimon may have been alluding to businesses like Lending Club and Prosper, which enable lending between users and are both have valuations in the billions. There are also a growing number of financial startups like Stripe, which handle payment transactions online and investing portfolio services like Wealthfront and Betterment.
“They are very good at reducing the ‘pain points’ in that they can make loans in minutes, which might take banks weeks,” Dimon added in his letter. “We are going to work hard to make our services as seamless and competitive as theirs. And we also are completely comfortable with partnering where it makes sense.”