JPMorgan Chase’s Dimon: Finn app was not a failure

Jamie Dimon Photographer: Christophe Morin/Bloomberg

JPMorgan Chase‘s now-defunct millennial-focused banking app, Finn, was not a failure, CEO Jamie Dimon said Tuesday during the bank’s second-quarter earnings call. The bank had pulled the plug on the digital-only offering in June, just a year after its launch, and rolled some of Finn’s most popular features into Chase’s main mobile banking app.

Specifically, Dimon said the bank learned how to conduct digital account openings through Finn and that the process was shaved down to just a few minutes. CFO Jennifer Piepszak added that 25% of new account openings at Chase are now digital signups rather than through a bank branch. The bank reported it has opened 2 million accounts digitally.

“We don’t look at those kinds of things like failures at all,” Dimon said. “That is how you learn. [Founder and CEO of Amazon] Jeff Bezos will tell you mistakes are good, mistakes are what make you smarter and better, and so I hope we make some really good mistakes that can teach us in all our businesses at some point.”

Despite shutting down Finn, the bank had 35.4 million active mobile users as of 2Q19, up 12% year-over-year, according to the earnings report.

Asked by an analyst whether the bank’s legacy platform is a hindrance to innovation or if the problem is overhyped, Dimon replied, “The hype has been around now for the better part of a decade, and we seem to be doing fine.” He acknowledged that legacy platforms often need to be fine-tuned — to become cloud-eligible, for example — in order to take advantage of efficiencies that reduce errors and bring down costs.

Dimon said the bank runs up to 7,000 applications with numerous digital platforms built around the legacy system and that the bank can now modify things in days and weeks versus the months and years it used to take. “Those numbers are factored into our tech spending,” he said, adding he expects spending to remain in the neighborhood of $11.5 billion next year, similar to previous years.

“We have to spend to win in this business,” Dimon said. “We have to continue investing in technology, and we’re going to do it regardless of the environment.” Piepszak added that the bank is still “in the early innings” in terms of artificial intelligence, machine learning and the cloud.

Also see: What Dimon’s Shareholder Letter Reveals About JPMorgan’s AI Approach

With regards to Facebook and its launch of Libra, Dimon said the social media giant’s digital currency is not a short-term concern. “We’re going to be talking about Libra three years from now,” he said. “I wouldn’t spend too much time on it.”

Regulators need to ensure a level playing field, where efforts like Libra will conform to the same anti-money laundering rules as traditional institutions, Dimon noted. The Senate Banking Committee was holding hearings on the proposed cryptocurrency on Tuesday.

While addressing Libra, Dimon said blockchain has been talked about for close to seven years, but “very little” has happened. Asked a follow-up question about JPM Coin, the bank’s digital coin that will allow for instant transfers of payments over a blockchain network, Dimon clarified, “We think blockchain is real.” He noted, however, there are barriers to adoption because of the complexity of the protocols and the amount of code involved in getting online. Still, he said the bank is “optimistic” about the technology’s potential.

On outreach to underbanked customers, Dimon pointed to the bank’s Secure Banking program, which launched in March and offers a low monthly fee and no overdraft fees, along with access to Chase branches, ATMs and digital tools. He also touted the benefits of the Zelle peer-to-peer payments service.

“Fintechs, of course, all these places try to eat your lunch,” Dimon said. “I think that’s good. That’s called American capitalism, and we have to stand on our toes to compete — and we are.”