JP Morgan (JPM) is set to launch its new digital bank Chase in the UK next week.
The move will be the American lender’s first overseas retail operation in its 222-year history, with an aim to upend the UK banking market.
Sanoke Viswanathan, head of JPMorgan’s international consumer division, told the Financial Times that the company would invest heavily to turn Chase into a serious force in the UK, with plans of expanding into Europe and Latin America.
“This is a very big strategic commitment from the firm’s standpoint,” he said. “We will spend hundreds of millions before we get to break-even and get to a place where this is a sustainable business, and we’re not in a rush.”
The launch of Chase, which was first mentioned in January this year, will be officially next week, according to sources close to the process. Reports have pointed to a commencement on Tuesday.
Read more: JPMorgan buys £3.5bn UK wealth app Nutmeg
Before its launch, JP Morgan ran a pilot programme with 6,000 employees for six months. It also has around 600 staff in the UK, 500 of which are new hires.
The digital-only bank will at first only offer current accounts with a rewards programme, however, it will eventually delve into personal lending and investment, and mortgages.
“In the current conditions there is a massive oversupply of mortgages and lots of providers . . . but to be a full service bank and have consumer trust over the long term it is an important product line,” Viswanathan added.
The new consumer-facing retail bank will be headquartered in London with a contact centre in Edinburgh.
It comes after JP Morgan acquired British robo-adviser Nutmeg in June, as part of its expansion plans. Banking rival Goldman Sachs (GS) also launched its own digital consumer bank, Marcus, in Britain in 2018.
Goldman so far has used the deposits piled into Marcus to fund its investment banking operations.
Watch: How to prevent getting into debt
In the UK, startups like Monzo, Revolut and Starling have gained significant market share in the county and poached millions of customers from traditional banks, meaning Chase is entering an increasingly competitive arena.
In August it was reported that JPMorgan appointed suppliers to provide cloud and digital banking infrastructure, including Amazon Web Services and 10x Future Technologies.
Chase is one of the largest consumer banks in the United States serving nearly half of the country’s households, including 55 million digitally active customers.
It currently offers a broad range of consumer banking products in America and holds several number-one positions including in deposit taking, digital banking and credit card issuance.
Watch: Why your bank statements might say buy-now-pay-later without you realising