Investment banking giant JP Morgan Chase & Co said it had hired and would take stakes in InvestCloud, a company that provides software which allows for easier access to online transactions for customers with banking and investment accounts. The largest US bank in terms of assets, JP Morgan did not disclose the amount of the stake in their announcement on Tuesday.
The investment appears to be a course of action by CEO Jamie Dimon, who in 2015 said Silicon Valley companies were threatening to disrupt JP Morgan’s business. Rather than blocking upstarts, Dimon has chosen to embrace those with technology that provides better customer service at lower costs. The deal with Invest Cloud is also a part of Dimon’s commitment to spend $300 million over the course of three years in improvements for digital management of assets.
As with most banks, JP Morgan is competing to ensure convenient but secure ways in which customers can conduct their daily affairs at any time or place.
Beginning next year, the bank will use InvestCloud to develop website dashboards and apps for clients ranging from individuals with investments of $1000 to those who manage family investments reaching $1 billion or more.
In time, the bank plans on refining the services to accommodate those who make their own investment decisions, people who only check managed accounts, and those who manage parts of their account and hire others for the rest.
InvestCloud says it offers thousands of “lightweight applets” that can be configured within a few days rather than months. The upstart began selling its products and services in 2012, servicing 660 institutions which use its tools to support a total of $1.5 trillion in assets.
Moreover, Dimon said in the announcement that he chose to make the deal as a result of InvestCloud’s “record of driving innovation for its institutional clients”
On top of InvestCloud, JP Morgan has also struck deals with other financial technology firms including OnDeck, which provides services that expedite small business lending; Virtu Financial Inc, which handles electronic US Treasuries trading; and TrueCar Inc, which provides infrastructure for online car shopping services.
“We are exploring with a range of vendors”, Kelli Keough, global head of digital wealth management, said. “It allows us to get to market faster and bring in innovation”.