JPMorgan's Dimon: Square innovated where we should have
Jamie Dimon confessed on Tuesday to having a little bit of Square envy.
During JPMorgan Chase’s annual investor day in New York, the bank’s chairman and CEO was asked what companies could get steamrolled by his bank, which has emerged as a financial-services disruptor. JPMorgan is investing billions of dollars per year in technology and recently rolled out its own online-only bank, dubbed Finn, and is set to become the first U.S. bank to launch a cryptocurrency.
But rather than answer that question directly, Dimon responded by praising a company, Square, that has done things he wishes JPMorgan Chase had done.
“They came up with this little dongle" — a device that attaches to a smartphone or tablet that allows merchants to accept card payments — "to process stuff and it was a great idea,” Dimon said.
Square then built off the success of its card-reader to provide other services to its business customers, such as wider variety of point-of-sale systems that allow merchants to accept cash or card payments. It also provides merchants with tablets and software that allows them to track sales patterns, inventory and other important data.
“We didn’t give them that opportunity, Square did," Dimon said.
Finally, Dimon lamented that Square beat JPMorgan to the punch in making online loans to small businesses.
Square Capital, its online lending arm, began offering business loans in early 2014 — nearly two years before JPMorgan began making its own digital small-business loans via a partnership with fintech lender OnDeck Capital.
Square said, "you know what, since we know this company and they might need an advance this time of the year, we might advance them $10,000 or $15,000 or $100,000,” Dimon said. “They did all this stuff we could have done that we didn’t do.”
None of this is to say that JPMorgan doesn't have innovations of its own up its sleeve.
For example, Dimon said he sees real opportunity in the "$40 trillion investments market," particularly around providing advice to households of modest means.
“People need to learn how to invest money,” he said. “Financial education, in America. .. we do a terrible job, typically for lower-income folks. We have some new products coming for that.”
He said he believes there are also ways for the bank to make money in leveraging its expertise in cybersecurity.
“We go to a lot of clients, we educate them in cyber [and] we don’t charge them for that," he said. "We call them up and say, ‘we see problems in your computers for how you move your money.' I look at that as a real opportunity.”