The news: JPMorgan’s UK digital bank Chase has attracted half a million customers and $10 billion in customer deposits since its September launch.
Breaking it down: Chase’s projected losses are a drop in the ocean when compared to its parent’s huge earnings. And its performance is on par, considering it only launched in September and operates in an industry where less than 5% of neobanks break even.
However, the losses are significant, given the pressure the bank is under for its 30% hike in spending on new projects, which is mainly tech expenditure. The bank’s projections for Chase are likely an attempt to appease investors who called for more clarity regarding the rationale behind launching the digital bank.
The big takeaway: JPMorgan will persevere with Chase, buoyed by encouraging customer acquisition and backed by the vast resources of the US’s biggest bank by assets.
Chase‘s ability to disregard the short-term performance of its bottom line sets it apart from most other digital banks in the UK. Its long-term outlook will allow it to grow naturally and widen its product line. But it still has to balance this with keeping investor concerns at bay.