JPMorgan shows how costly the neobanking business is 💸📲 (it’s a long-term game); Grab spins off a new FinTech app as it doubles down on FinServ 🚀; The first crypto company to enter Fortune 500 🤯

Good Morning FinTech, 25 May

Good morning Everyone,

Hope you missed me & the newsletter 😎 Today’s issue focuses on JPMorgan that shows how costly the challenger banking space is (but it could soon become a force to be reckoned with), Grab doubling down on financial services, and the first crypto company to enter the prestigious Fortune 500 fam. Let’s jump straight into the good stuff:

JPMorgan shows how costly the neobanking business is 💸📲 (it’s a long-term game)

The news 🗞 Banking giant JPMorgan Chase has announced it is expecting to lose more than $1 billion in the next few years on its new digital-only international consumer bank that began operations in the UK in 2021. That’s a lot of money.

More on this 👉 According to declarations offered to Financial Times, company officials have stated that JPMorgan, which is the largest US bank by assets, estimated that losses on the venture would be about $450M in 2022 and a similar amount for the next few years.

The bank has set a 5 to a 6-year timeframe to hit breakeven. That seems a reasonable timeframe given that less than 5% of neobanks break even.

Was it worth it? JPMorgan Chase's push into the UK retail banking market has seen the giant Wall Street bank attract 500,000 customers and $10B of customer deposits since its launch only 8 months ago. That’s not bad at all!

What’s next? Obviously to make it work and become a force to be reckoned with in FinTech. It seems that JPM has both the strategy & the resources to do it. Here’s the takeaway: