- JPMorgan Chase reportedly is on track to open a digital-only UK bank.
- But the crowded UK market will present its own challenges, making differentiation imperative.
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But as the outbreak of the coronavirus pandemic rocked the UK banking landscape in the past several months, Chase is now looking to take advantage of the shift away from branch banking that’s occurred amid lockdown measures. This will be Chase’s second attempt at a digital-only offshoot after shuttering its Finn app in the US last year.
- Finn’s downfall was its similarity to Chase’s existing mobile banking app. The millennial-geared service was discontinued in June 2019, just a year after its national rollout. It was built on top of the same back-end infrastructure as Chase’s main mobile banking app, and the two looked very similar, potentially not giving customers enough of an incentive to open a Finn account. Similarity to an existing offering won’t be an issue for the UK product, as Chase doesn’t currently have a presence there. But that could be a double-edged sword, as it also doesn’t have a high level of brand recognition to rely on in the market.
- And with a stiff competitive landscape, the UK could present its own challenges. Chase will be joining Goldman Sachs, which launched its own digital-only offshoot, Marcus in the UK in 2018 — it now counts 500,000 customers who have deposited more than £21 billion ($27.4 billion) in savings, per AltFi. Meanwhile, the neobank landscape is crowded with prominent neobanks that offer cutting-edge digital features, including Monzo, Starling, and Revolut, which each count millions of users. Even some UK incumbents’ offshoots have failed to dent the market: Earlier this year, RBS shuttered its standalone digital-only bank, Bó, citing pandemic fallout.
But if Chase executes its digital offering according to features that are in-demand, the UK market could prove to be more receptive. Having multiple bank accounts from different banks is common in the UK, which means there is room for Chase — though it will have to bring value-add features that would differentiate it from incumbents and neobanks alike.
The ability to cancel subscriptions to services like Netflix, for example, was considered “extremely” or “very valuable” by 68% of mobile banking users who responded to Business Insider Intelligence’s UK Mobile Banking Competitive Edge Study 2020 (Enterprise only), but none of the country’s top 10 banks in the study offer it. Bringing such features to its digital bank could help Chase stand out in the crowded market.
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