JPMorgan’s Dimon Sees Facebook to Google Challenging Bank
JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon sees challenges from companies such as Facebook Inc. (FB) and Google Inc. (GOOGL) as they seek to provide online banking and money-sending services.
“We move $10 trillion a day,” Dimon said today at the Euromoney Saudi Arabia conference in Riyadh. “We’re one of the largest payments systems in the world. We’re going to have competition from Google and Facebook and somebody else.”
Companies are competing for a share of the global electronic-payments market worth as much as $1.8 trillion a year, according to Capgemini’s 2013 World Payments report. Google created Wallet, a system using smartphones, and Facebook is seeking regulatory approval in Ireland for a service to allow users to store money on the site, the Financial Times reported last month without saying where it got the information.
Dimon, 58, said regulators must decide whether they should oversee such companies providing financial services. “There’s no way that Google wants to be a regulated bank,” he said.
Apple Inc., (AAPL) which has more than 400 million credit cards on file at its iTunes Store, is exploring an expansion of the mobile-payments system, a person with knowledge of the matter said in January. PayPal, the online payments system owned by EBay Inc. (EBAY), contributes almost 40 percent of the San Jose-based e-commerce company’s revenue, data compiled by Bloomberg show.
JPMorgan will continue to contend in the industry as competition increases, Dimon said.
“We are devoted to making it easier to move money and authenticate who you are, reduce fraud,” he said.
DBS Group Holdings Ltd., Southeast Asia’s largest bank, said it’s also beginning to see technology firms make inroads into their turf, including Chinese companies Alibaba Group Holding Ltd. and Tencent Holdings Ltd.
“We’re an industry of information, we’re bits and bytes, so we’re easily digitizable,” Piyush Gupta, the Singapore-based bank’s CEO, said in an April 30 interview on Bloomberg Television. “There’s no reason to expect therefore that these companies will not start eating a large part of our lunch.”
Dimon also said competition from non-banking financial institutions was intensifying as lenders face strict capital requirements globally. In the so-called shadow banking system, specialized lenders, money-market funds and other financial institutions offer services similar to banks in a less-regulated environment, he said.
“As banks have to have more capital liquidity, it will push things to that segment,” Dimon said. “There’s nothing wrong with that.”
JPMorgan slid 0.9 percent to $53.76 at 12:05 p.m. in New York. The shares have declined 8.1 percent this year, compared with the 2.4 percent drop of the 24-company KBW Bank Index.
To contact the editors responsible for this story: Dale Crofts at firstname.lastname@example.org James Doran, Steven Crabill