Jamie Dimon, chairman and president of JP Morgan Chase, says his bank can learn from disruptive payment systems like bitcoin.
Dimon, famously dismissive of the digital currency, made the comments in his annual letter to JP Morgan shareholders, noting:
“You all have read about bitcoin, merchants building their own networks, PayPal and PayPal look-alikes. Payments are a critical business for us – and we are quite good at it. But there is much for us to learn in terms of real-time systems, better encryption techniques and a reduction of costs and ‘pain points’ for customers.”
The letter, which flagged the bank’s recent “record results” and incoming competition in the payments space, suggested JP Morgan would seek to monitor these competitors – and outpace them.
“We need to acknowledge our own flaws … Rest assured, we analyse all of our competitors in excruciating detail – so we can learn what they are doing and develop our own strategies accordingly.”
Bitcoin on the radar
The CEO has made headlines with his remarks on bitcoin’s disruptive potential before.
Speaking on a panel at the Institute of International Finance’s annual conference in 2013, he said: “Bitcoin developers are going to try and eat our lunch and that’s fine,” adding, “that’s called competition and we will be competing”.
During an interview with CNBC reporter Andrew Ross Sorkin, Dimon also stated that the digital currency was “a terrible store of value. It could be replicated over and over”.
He also expressed scepticism that the digital currency could face up to regulatory scrutiny, stating:
“It doesn’t have the standing of a government. And honestly, a lot of it — what I’ve read from you guys [CNBC] — is being used from illicit purposes. And people who will get upset with it is governments. Governments put a huge amount of pressure on banks: know who your client is, did you do real reviews of that. Obviously, it’s almost impossible to do with something like that.”
Traditional financial institutions have been paying increasing attention to developments in the bitcoin space. In turn, a flurry of Wall Street execs – including ex-JP Morgan employees – are now jumping ship to bitcoin startups.
Last month saw the departure of ex-JP Morgan Chase executive Blythe Masters to join bitcoin trading platform Digital Assets Holdings LLC as its chief executive. A former JP Morgan commodities trader, Daniel Masters, set up the first regulated bitcoin fund, GABI, in Jersey last year.
Image: Steve Jurvetson via Wikimedia Commons