JPMorgan Chase has agreed to buy digital wealth manager Nutmeg Saving and Investment, part of a push to establish a retail banking presence in the UK.
JPMorgan said in January it would launch a new digital bank in the UK, offering consumer banking services there for the first time. Called Chase, it is currently being tested internally with JPMorgan employees ahead of a public launch later this year.
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By GlobalDataNutmeg, founded in 2012, has more than 140,000 customers and £3.5 billion under management, the equivalent of around $5 billion. A price for the acquisition wasn’t disclosed, but it is estimated to be between £500m and £1 billion.
Nutmeg’s savings and investment products won’t initially be offered through the retail banking project, the bank said.
JPMorgan is entering a crowded digital banking marketplace in the UK
Regulators encouraged new startups, including Starling Bank and Monzo Bank, to boost competition in the wake of the last global financial crisis. These so-called challenger banks have forced traditional lenders to improve their digital offerings but have struggled to earn profits.
JPMorgan last year considered making a bid for Starling Bank, founded by Anne Boden in 2014.
JPMorgan previously tried to launch a digital bank in UK cities and markets where it didn’t have Chase branches, but closed the product, called Finn, in June 2019 after slow pickup.
Bank executives have said they learned lessons from that programme, including that the Chase brand resonated better than a new name.
A new playground for the big boys
The arrival of JP Morgan into the retail banking market promises to bring new intrigue to an increasingly competitive sector.
Having been challenged by younger rivals, two of the world’s most powerful lenders have built their own digital banks and are sending them across the Atlantic.
First came Goldman Sachs with Marcus, an online savings platform that has attracted just over 700,000 British customers in less than three years.
Now JP Morgan is squarely in the digital retail banking game.
