For the past decade or so, there’s been a lot of talk about what the biggest threat to institutional banks is. First it was the fintechs that were going to “disintermediate” banks, but that threat has largely dissipated, and indeed many banks are partnering with or even outright acquiring fintechs these days.
In more recent times, it’s big tech that’s been a bogeyman for banks. There’s been a spate of studies released with the “millennials trust Apple/Amazon/Google etc. more than banks” theme. Many have opined and wondered what would happen if one of these behemoths decided to become a bank. But for now, it seems these tech giants have designs more on controlling the world rather than simply becoming banks.
But an interesting recent op-ed in American Banker (SUBSCRIPTION) posits that the biggest threat to banks is banks, or more specifically one bank, that being J.P. Morgan Chase. The piece talks about the bank’s aggressive branch expansion strategy into areas where they have no presence (a strategy that is only starting in earnest now due to a decision made by regulators behind closed doors to halt the bank’s growth for the better part of this decade, only made public a few months ago.) Chase has also been rapidly building up its digital capabilities; last year it launched a digital-only bank targeted to millennials called Finn by Chase. It’s also invested heavily in its own internal innovation capabilities.
To paraphrase FDR, could it be that the only thing banks have to fear is a bank itself?