Inside JPMorgan's AI Revolution π€π¦; Bank of America is poised to enter the stablecoin market ππͺ; American Express expands Chinese footprint π³π¨π³
You're missing out big time... Weekly Recap π
π Hey, Linas here! Welcome back to a π weekly free edition π of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, itβs the only newsletter you need for all things when Finance meets Tech.
If youβre not a subscriber, hereβs what you missed this week:
10 FinTech and Finance stocks to include in your portfolio for 2025 πΌ | Part II [seize the Future: ride the wave of innovation reshaping Finance & FinTech]
The Top 70 AI Agents You Must Know π€ [unlock the power of AI agents to transform your business]
AI 100: Top Artificial Intelligence Startups of 2024 π€πΈ [these companies raised $28B already. Find whose backing them, unlock their exclusive pitch decks & learn from the best]
Latin America's digital banking juggernaut Nubank combines explosive growth with industry-leading profitability π€π [breaking down their Q4 2024 financials, what they tell us & why you should be really bullish on NU 0.00%β]
Stripe surges to $91.5B valuation as AI fuels record payment growth π³π³ [a quick look at their annual 2024 letter with key insights & things worth paying attention to, how Stripe stacks against Adyen + more bonus dives inside]
MercadoLibre accelerates growth while expanding profit margins ππΈ [unpacking their latest numbers, why they matter and whatβs next for MELI 0.00%β]
PayPal is strategically expanding its PYUSD stablecoin πͺπ [whatβs the play here, why it matters & whatβs next + bonus deep dive into PayPal]
Blockβs Q4 2024: dual ecosystem strategy gaining momentum, but execution will define 2025 success π€π [unpacking the most important numbers, what they mean & whether XYZ 0.00%β is worth your time and money in 2025 + bonus deep dives into Squareβs biggest competitors in the space]
Bitcoin ETFs face historic exodus as crypto market cools π«£π [what it means & what can we expect next]
Global 6,200+ Investor Database to Fast-Track Your Funding in 2025 πΈ [shorten your fundraising time, find your perfect investors, and close rounds faster]
As for today, here are the 3 fascinating FinTech stories that were changing the world of financial technology as we know it. This was yet another insane week in the financial technology space so make sure to check all the above stories.
Inside JPMorgan's AI Revolution π€π¦
Following the trends π€ JPMorgan Chase JPM 0.00%β America's largest bank, is making a strategic bet on artificial intelligence by placing it at the center of operations for its 300,000 employees.
According to a recent Wall Street Journal interview with Teresa Heitsenrether, JPMorgan's chief data and analytics officer who oversees the bank's AI strategy, the technology is already showing promising results across various functions.
Letβs take a look at the most interesting insights shared.
More on this π Since its rollout, JPMorgan's AI tool called LLM Suite has been deployed to 200,000 employees, with half using it actively every day. Not too shabby!
On average, employees engage with the tool for one to two hours weekly. The system leverages generative artificial intelligence from OpenAI and other providers, helping employees across multiple business functions.
Heitsenrether, who despite not being a technologist brings over 20 years of experience running key businesses at JPMorgan, identified numerous applications where AI is improving productivity. These include:
Streamlining the preparation of client briefing materials
Analyzing legal documents
Enhancing call center operations, and
Supporting investment banking analysis.
Rather than developing proprietary large language models, JPMorgan is focusing on integrating existing models with the bank's internal knowledge and data.
The bank is following a three-phase approach: first, deploying tools for general use; second, connecting models to JPMorgan-specific information like policies and client data; and third, enabling more sophisticated reasoning capabilities.
Zoom out π Regarding workforce implications, Heitsenrether offered a nuanced perspective. Unlike previous technological waves that primarily automated clerical tasks, AI has applications across all job functions. She emphasized that AI will augment rather than replace employees, enabling humans and AI to accomplish more together.
The bank maintains rigorous controls around AI implementation, applying different models based on risk profiles. For high-stakes decisions like credit approvals, JPMorgan employs constrained, transparent models, while using more flexible systems for lower-risk scenarios like travel planning.
βοΈ THE TAKEAWAY
Whatβs next? π€ Looking ahead, JPMorgan's approach signals a transformative shift in how financial institutions will operate. As banks integrate AI more deeply with proprietary data, we'll likely see the emergence of financial institutions that function increasingly as technology companies with banking licenses. This evolution will create competitive differentiation based on how effectively institutions leverage their unique data assets. As Heitsenrether brilliantly put it:
"The models are all trained on all the data that's publicly available... What the models don't have access to is the data that's specific to the enterprise. That then becomes the differentiator."
Looking at the bigger picture, this suggests customer experiences will become increasingly personalized and responsive. Digital channels empowered by AI will handle more complex inquiries that previously required human intervention, potentially reshaping branch networks and call centers. Additionally, the careful, phased rollout at JPMorgan also indicates that successful AI implementation in banking will require a deliberate balance between innovation and risk management. Financial institutions that can navigate regulatory concerns while scaling AI capabilities will likely emerge as industry leaders. Zooming out, as AI becomes more deeply embedded in financial services, we may see a new paradigm where human expertise is channeled toward higher-value activities like relationship building and complex problem-solving, with AI handling more routine aspects of financial operations across both consumer and institutional banking. AI-first banks are the future.
ICYMI: Wall Street giant JPMorgan continues to show strong momentum despite macro headwinds πͺπ¦ [breaking down their Q4 2024 financials, what they mean & whether JPM is worth your time and money in 2025 + bonus reads on JPM inside]
Bank of America is poised to enter the stablecoin market ππͺ
The news ποΈ Banking giant Bank of America BAC 0.00%β is preparing to enter the cryptocurrency market through stablecoins once regulatory frameworks are established, according to CEO Brian Moynihan.
Speaking at the Economic Club of Washington, D.C., Moynihan expressed confidence that stablecoins are imminent in the financial services industry, describing them as digital assets backed by the U.S. dollar that function similarly to money market funds with check access.
Letβs take a quick look at this and see why it matters.
More on this π "If they make that legal, we will go into that business," Moynihan stated during his interview with David Rubenstein, indicating that Bank of America would offer "BofA coins" linked to U.S. dollar deposit accounts once legislation permits. He noted that under the Trump administration, lawmakers are actively working to pass stablecoin regulations.
While expressing certainty about stablecoins' arrival, Moynihan raised questions about their practical applications, commenting that "the question of what it's useful for is going to be interesting."
Zoom out π The stablecoin initiative reflects Bank of America's broader technology strategy, with the institution investing approximately $4 billion in new technology annually and allocating an additional $8-9 billion to maintain existing systems.
This technological focus has already yielded significant results, with 90% of customer interactions now occurring digitally and 40 million consumers using the bank's digital services.
Despite this digital transformation, Moynihan emphasized that human interaction remains crucial. Bank of America maintains approximately 3,700 branches across the United States, recognizing that customers value multiple communication channels.
βοΈ THE TAKEAWAY
Whatβs next? π€ At the core, Bank of America's potential entry into the stablecoin market represents a pivotal moment in the mainstream financial adoption of cryptocurrency technologies. As one of the largest U.S. banks (ranking 18th in the Fortune 500), BoA's move signals growing institutional confidence in blockchain-based financial products. This should lead to:
Mainstream legitimization: BofA's involvement would likely encourage other major financial institutions to develop similar offerings, potentially transforming stablecoins from relatively still niche products to standard financial tools.
Regulatory framework development: The bank's conditional stance ("if they make that legal") highlights the critical role that upcoming regulations will play in shaping the stablecoin landscape. The Trump administration's crypto-friendly approach may accelerate this process.
Integration with traditional banking: Rather than competing with traditional banking, BoA's approach suggests stablecoins will be integrated into existing financial infrastructure (as they should be!), potentially offering customers the benefits of both worlds.
Evolution of payment systems: BoA's stablecoin initiative could significantly impact payment processing, potentially reducing costs and increasing transaction speeds while maintaining the stability of dollar-backed assets.
Slowly then all at once. Bullish.
ICYMI:
PayPal is strategically expanding its PYUSD stablecoin πͺπ [whatβs the play here, why it matters & whatβs next + bonus deep dive into PayPal]
American Express expands Chinese footprint π³π¨π³
The news ποΈ American Express AXP 0.00%β has formed a significant alliance with Alipay, China's digital payments giant, to accelerate its expansion in what analysts consider the world's fastest-growing card market.
The partnership enables American Express cardholders in mainland China to add their credit cards to Alipay digital wallets, substantially expanding their payment options across the country.
Letβs take a quick look at this.
More on this π This strategic move positions American Express to capitalize on China's booming digital payments landscape at a time when global card usage is projected to surge 43% worldwide by 2029. The Asia-Pacific region is expected to experience the most dramatic growth at 46.8%, far outpacing the United States' projected 27% increase, according to research firm Nilson Report.
More importantly, the partnership represents a significant milestone in American Express's China journey. In 2020, the New York-based company became the first non-Chinese firm to receive a license to clear local currency card transactions through its own network. Before this regulatory breakthrough, American Express was required to process payments through partnerships with Chinese state-controlled entities like UnionPay.
Zoom out π Other major card networks have faced varying degrees of success in China's closely regulated financial market. Mastercard MA 0.00%β received initial approval to operate in 2020 and began processing transactions in 2023 following high-level discussions between U.S. and Chinese leadership. Visa V 0.00%β, despite applying for a license in 2020, continues working with Chinese authorities to secure approval.
Alipay, established in 2004 as a subsidiary of Alibaba Group, claims acceptance by 80 million Chinese merchants and has expanded its digital wallet services to other Asian markets including Thailand and South Korea.
However, we must note that the partnership comes with limitations β notably, the service is unavailable to holders of American Express cards issued outside mainland China.
βοΈ THE TAKEAWAY
Whatβs next? π€ This alliance signals a significant shift in China's approach to international financial service providers while highlighting American Express's commitment to the Chinese market. The partnership could also serve as a blueprint for other Western financial institutions seeking to navigate China's complex regulatory environment. For AmEx, success in China represents enormous growth potential given the country's massive population and rapidly expanding middle class. However, challenges remain, including intense competition from entrenched local payment platforms and potential regulatory uncertainties. Looking ahead, American Express will likely focus on deepening its integration with China's digital ecosystem while expanding its cardholder base within mainland China. Competitors will watch closely, potentially accelerating their own partnership strategies with local technology companies.
ICYMI: American Expressβ Q4 2024: premium FinTech powerhouse poised for profitable growth ππ³ [breaking down their Q4 2024 financials, what they tell us & whatβs next for AmEx + a bonus dive into their competition]
π What else Iβm watching
SEC Drops Investigation into Robinhood Crypto π The Securities and Exchange Commission (SEC) has dropped its investigation into Robinhood's HOOD 0.42%β crypto arm. This news follows the SEC's decision to also drop its case against Coinbase COIN -0.23%β, signaling a shift in the regulator's approach to the crypto industry under the new leadership with Donald Trump in office. Robinhood had previously received a Wells notice from the SEC, indicating potential enforcement action related to its cryptocurrency listings, custody, and platform operations. However, the SEC has now concluded its investigation without taking further action. ICYMI: Robinhood's wild Q4: record profits, 88% AUC growth, and global expansion signal a new era of growth π€πΈ [breaking down their latest Q4 2024 numbers, what they mean, and whether Robinhood is worth your time and money in 2025 & beyond]
PayPal Partners with Verifone for In-Person Payments Expansion π€ PayPal PYPL 0.00%β has announced a global partnership with Verifone to enhance its in-person payments presence. The collaboration will offer enterprise merchants an omnichannel solution combining Verifone's hardware with PayPal's Braintree payment processing and e-commerce capabilities. Targeting retail, grocery, quick-service restaurants, and more sectors, the partnership aims to drive mass adoption of in-person payments. This initiative is part of PayPal's new merchant platform, PayPal Open, which will launch in the US soon, followed by the UK and Germany later this year. ICYMI: PayPal's strategic reset shows promise, but market share concerns overshadow progress π€π [deeper dive into their Q4 2024 financials, what they mean, whatβs next & whether PayPal is worth your time and money in 2025]
UK Court Approves $200 Million Mastercard Settlement ποΈ The Competition Appeal Tribunal in the UK has approved a Β£200M settlement between Mastercard MA 0.00%β and Walter Merricks, the former head of the UK Financial Ombudsman Service, over a class action lawsuit. The lawsuit, filed in 2016, accused Mastercard of overcharging British consumers for credit card interchange fees. Although the settlement is significantly lower than the initial Β£10 billion estimate, the tribunal deemed it "just and reasonable." The litigation funder Innsworth Advisors had challenged the settlement, arguing it undervalued the claim. ICYMI: Mastercard launches One Credential in a bid to transform digital payments π³π₯ [what itβs all about & what it tells us about the future of digital payments + bonus deep dives in Mastercard & Visaβs latest financials]
πΈ Following the Money
CredCore, a vertical-AI company that transforms debt capital markets for lenders and borrowers, today announced $16M in Series A. The round was led by Avataar Ventures.
Capim, a Brazil-based startup specializing in BNPL solutions for dental services, has secured $26.7M in a Series A funding round.
Unique, a Switzerland-based startup providing AI platforms to the financial services market, has secured β¬28.6M in funding.
π Thatβs it for today! Thank you for reading and have a relaxing Sunday! And if you enjoyed this newsletter, invite your friends and colleagues to sign up:
Perfect read to end the week. Thank you!