What's up you guys, sasha here a slightly different video today, because some news has just come in that i really needed to go and make a video about, and the news are jp morgan have just announced that they are launching a new digital bank in the uk. This is really interesting. I wanted to really quickly record a video to tell you all the details that we do know as of now as to exactly what this bank is going to be, what it's going to do, what kind of products it might do, i'm going to tell you a Few thoughts that i have about it, a few things that i think are really important to point out. Um, let's dive right in i'm gon na just do it live i'm gon na go through all the details here.

I've got the statements. I've got some of the news that has been published and in the announcement they've made. Jp morgan are saying that they want to go and enter the uk as a strong player already playing in the same space in the us. They are one of the biggest and most popular banks in the us in their retail banking space.

They are really well known for their credit cards that do really really cool things, really really cool features, really great rewards and perks. I'm gon na get to that in just a second, but at the moment the bank hasn't launched yet and they're not gon na be launching imminently. This still is a few months away, however, because they're saying they're a few months away. This is implying that they've already done quite a lot of the legwork, because otherwise we'll be looking at a longer time scale than that now the plan is to launch this bank under the chase brand, which is the one that they use in the us, and that Is really well known around the world and the in the uk as well.

It probably comes a surprise to a lot of consumers who didn't quite expect a big u.s bank to come and establish themselves really quickly in the uk, but jp morgan have been working on this for some time. According to their press release, they have already hired 400 people to launch this bank and those people are going to be based in london's canary wharf. So that's pretty much all the information that this press release gives it's not a lot, but i'm going to dive into some of the wording and i'm going to explain some of the other things that i was thinking when i was reading it and first i want To just say, i think it's great. I think it's really good that another big bank is going to be opening in the uk and it's going to offer even more competition.

It's great that we already have monzo, we already have sterling and revolut is applying for their banking license as of a few days ago, but i feel like we can probably do with more options than that sure we have all the incumbents. We have all the old school banks, but i think it's good for there to be new blood. I think it's good for there to be new disruption, new people with new ideas showing maybe how they think about doing the same thing in a slightly different way. You might remember that in december 2020, only last month, jp morgan was one of the two banks that was touted by the media as wanting to go and buy sterling along with lloyds now immediately after this was released across all the different mass media, ann bowdan, who Is stanley banks ceo came out and said that she has absolutely no interest in selling the bank to them or to anybody else, and they are planning to do an ipo at some point in 2022.

So because of that, or maybe that was just part of the strategy of launching the back and drawing a bit of attention to them in a relatively short space of time, they've gone and turned it around and they've decided to go and launch a bank all of Their own, rather than buying, which is quite an interesting move. Now, if you look at the announcement, it says that they're going to be launching a range of products which is interesting because it implies that they're not going to do what monzo and styling bank have done and launch with just one monoline product like a bank account It sounds like they're going to be offering a bit more than that and based on their experience, knowledge and sort of brand. If you like in credit card industry, i'm expecting that maybe there's going to be some exciting stuff in that space coming there as well. In the us they offer some of the best perks.

If you look at any us-based personal finance channels, you will notice that they talk about chase sapphire and various other chase products a lot. So i think it's really interesting to see how that ports over to the uk, because here's the thing in the uk the credit card space works really really differently, and this is somewhat underplayed by a lot of people. Fundamentally, though, the revenues that you can earn are completely different. For example, in the us you can earn a lot of interchange from credit cards which you can't in the uk because of some eu legislation.

That is now uk legislation as well, which limits the amount that banks can charge in the us. These numbers can be high, they can be 1.7 percent, two percent, even greater. They can be over three percent with american express and the various other mastercard world, etc. I'm not going to get into the specifics of exactly how those different kinds of schemes work, but in the uk the maximum that can be charged is not point three percent, and that not point three percent has to be shared between mastercard or visa or any other Scheme like that and the bank, so the bank will actually only get a small proportion of the overall, not a small proportion of good proportion, but it's not a lot of money and there's other restrictions as well like, for example, in the uk.

Some practices are common that don't exist in the us, like, for example, repricing on credit cards. Changing the aprs and also uk. Consumers are not really used to credit cards that, for example, charge fees which is very common and prevalent in the us, so be really interested to see how they go and adjust to that. Another interesting thing is jp.

Morgan is not a kind of tech company. If you like, they are a big established bank and the problem with the biggest average bank is that comes with big established systems. So it will be really interesting for me to see. Will they go and put essentially those systems over and make it look nice and pretty make it? Look like a challenger bank make it look like there's some really exciting stuff, even if it is powered underneath by some of those systems, because the likelihood is, if that's the case, there'll still be a few things that just don't do what you expect them to do, Or you'll be required to submit paper or there'll be some kind of complicated ways that shouldn't exist so it'll be really interesting to see what happens with that gordon smith, who is the chief executive of the consumer and community banking at jp morgan, said the uk has A vibrant and highly competitive consumer banking marketplace, which is why we've designed the bank from scratch to specifically meet the needs of the customers here now.

Does he really mean from scratch? I don't know but it'll be really interesting to find out now. Another point i want to make is that styling and monzo already offer really great propositions. They offer pretty much free banking. They offer services that their competitors, the existing big banks, don't offer, and the products work really great.

The apps have still a few things that they can go and improve, but they're already so much better than they were and a lot better than pretty much. All the high street banks and it'll be interesting to see, will jp morgan just go and try to copy that and sort of create a third version that is very similar but slightly different, or will they try to do something that works in a fundamentally different way? Will they go and try to innovate and make it feel different, make it do something different? I don't know at this stage. I don't think anyone knows at this stage, so it will be quite exciting to see what happens with that as well. Now it's really important to remember that we have heard other banks go and launch challenger banks in the uk only for those to fail spectacularly the most well-known one out of the big banks trying to go and pretend that their challenge bank was when nat west went And launched a bank called bow only a few months after they launched that bank.

It failed spectacularly they fired everyone who was working on a project including some consultants that they hired and uh. It was scrapped completely. So the history of that is not great. Actually, the history is even worse than that, because jp morgan themselves actually tried to launch a challenger bank in the us only a couple years ago called finn, but that venture also failed and they had to shut that whole thing down as well.

So there isn't the best of histories of big banks starting including jp morgan themselves. Maybe they've learned the lessons and maybe they're going to actually bring the lessons that they've learned to this and do this in a much better way. We shall have to wait and see now. The ceo of this new bank has officially already been named, and apologies for my pronunciation, but it is snook viswanathan and he has had a long career as a senior executive in jp morgan's corporate and investment bank has been there done.

That got a lot of really interesting experience, but my issue is this: no matter how smart this guy, i am, he looks incredible. He looks incredibly smart, but my problem is this: is the chief executive of a retail bank, something that deals with consumer finance products and ultimately experience and how these things work is really really vital to making success of them, because i've seen multiple examples of people who've. Never worked in the industry go and set up consumer finance companies go inside of retail banks over the last few years. Only for those people to fail miserably.

I have actually worked on some projects where people went and hired me to go and help them out to go and get their banking license, and a few other things like that, where i saw some similar things as well, there's been more than one of those. Some of them went better than others, but with some of them i just saw that the people just didn't really understand what they were doing, no matter how smart those people were so be interested to see. Have they actually brought in people who really understand the industry? Have they brought in people who really understand how these products work at a really granular level, and if so, how good are these products gon na? Be i again have no idea, but it'll be really interesting to find out. That's pretty much all i have to tell you at this stage as and when whenever they go and launch this new thing or maybe i'll, be able to go and see it just before we'll see we'll have to we'll have to wait and see.

I will tell you everything there is to know at the moment this is it there isn't very much but keep your eyes open, because i think this could be really exciting. This definitely has the capacity to shake things up, so i am gon na talk about it. As soon as there's anything more thank you very much for watching, really really appreciate it and i'll see you guys later. You.