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I N D U S T R Y I N S I G H T / S C O T T D A I
Over the past several years, the largest U.S. banks have invested
billions in fintech and fintech startups to strengthen their
offerings and position these organizations with new market
entrants, evolving technologies, and changing customer
preferences. Banks such as JPMorgan Chase (JPMC) have
emphasized an enhanced digital profile. Campaigns like "Mobile
First, Digital Everything" cater to the 60 percent of U.S. banking consumers
who have said they'd be willing to try a financial product from a bank they
already use. is rate is higher (83 percent) for younger customers. JPMC also
recently launched a pilot for JPM Coin aimed at reimagining how they would
like to handle institutional payments.
Launched in 2017 and 2016, respectively,
peer-to-peer payment app Zelle and artificial
intelligence assistant Erica have driven digital
activity and subsequent sales from Bank of
America's (BofA) growing pool of 35 million
digital customers. BofA's peers have made
similar investments in their retail banking
businesses to cater to their customers' evolving
expectations.
e largest banks have primarily focused
on three fintech investment categories over the
past several years: payments and settlements,
data analytics, and financial services customer
experience. ese categories comprise more
than 55 percent of all fintech investments
made by these banks over the same time.
Research suggests these investments will be
used to support existing products and customer
segments. Multiple fintech startups have
received syndicated investments from these
banks.
Large banks have been active in redefining
their strategy and investment in fintech
capabilities.
Consumer and investment banking
continue to be the key focal points for large
banks' agendas through their dominance in
market presence and innovation budget (e.g.,
Where are the big banks putting their fintech investment
dollars? Regional lenders can follow their lead and find a
pathway leading straight into the future.
