JPMorgan Chase & Co. is planning to launch a digital bank in Germany as its second international consumer outpost, a move that will create a launchpad for the biggest US bank to further expand in Europe.
The launch is slated for late next year or early 2025, and the firm expects to target other EU countries after that, according to people familiar with the plans. JPMorgan has been hiring in Berlin as part of the effort, and intends for the German capital to be its base for EU consumer operations, the people said, asking not to be identified as the plans aren’t public.
New York-based JPMorgan made its first consumer foray beyond US borders in late 2021 with a digital-only retail bank in the UK offering checking (current) accounts. The bank plans to introduce credit cards on this platform already this year, and then personal loans, according to unofficial sources.
Germany’s banking market is one of the most competitive in the world. The vast majority of the country’s hundreds of lenders are small and their unique ownership structure — many savings banks belong to municipalities — means they’re under less pressure to generate profits.
JPMorgan has long eschewed the costly, branch-heavy approach that its rivals Citigroup Inc. and HSBC Holdings Plc used as they expanded overseas in decades past. That restraint proved prescient as the rise of fintech apps in recent years changed the calculus for JPMorgan’s international consumer efforts.
Now, JPMorgan is one of the few big US banks expanding its consumer presence internationally. Citigroup is in the process of selling off more than a dozen retail units around the world. Goldman Sachs Group Inc. has also said its pulling back in consumer banking.
All this indicates that increasingly large banks with history are revising their development strategies towards neobanks with digital solutions.