JPMorgan Chase & Co (JPM - Free Report) is pumping $25 million to Financial Solutions Lab, with a view to support fintech start-ups from lower income households.
The financial inclusion lab was established as a joint initiative with the Financial Health Network to identify and develop fintech solutions that can improve the financial health of people across the United States. With this new investment, the Financial Solutions Lab will invest in both early-stage fintech solutions and existing digital products.
Also, it announced that it has opened a community-focused branch in Harlem. The bank plans to open six more such branches in 2020 in different cities, including Los Angeles and Chicago.
“What we are doing in Harlem is inspiring our work in other communities across the country,” said Thasunda Brown Duckett, CEO of Chase Consumer Banking. “We will continue to make our branches community destinations, strengthening relationships with community partners and investing in FinTech that can help serve people and their personal financial journey, wherever they are.”
Use of fintech, particularly in transaction and payments, has been pivotal in reducing costs for U.S. banks. Also, digitization has driven inorganic growth as well as bottom-line results for the broader banking industry.
Financial transaction service providers such as PayPal (PYPL - Free Report) , Square (SQ - Free Report) and Apple’s (AAPL - Free Report) Apple Pay platform have been posing threat to retail bankers by consistently innovating and attracting more active users by improving customer experience.
Almost all of the big U.S. banks have invested generously in creating their own online lending platforms — JPMorgan, Finn being an example. In the era when more than 70% of transactions are taking place online, traditional payment processing methods are likely to affect global banking businesses.
JPMorgan’s robust business profile and diversified product offering help it gain market share. Further, the bank’s focus to tap new business opportunities and strengthening credit card business bodes well.
The stock has rallied 20.2% so far this year compared with the industry’s growth of 18.1%.
Currently, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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