Chasing The Future
Chase's Digital Banking Revolution Soon To Hit German Shores
JPMorgan Chase, the largest consumer bank in the United States, providing financial services to over 60 million American households, has confirmed its plans to enter the European Union. The company is set to introduce its online banking service, Chase, in Germany and the broader European region.
Chase initiated its European venture in September 2021, introducing its digital bank to the UK market. Back then the app-based platform covered customers' basic financial needs offering a free account and card.
A year after its launch, the UK digital bank reached 1 million customers, held over £10 billion in deposits, and recorded approximately 92 million card and payment transactions. Chase revealed that at that time, customers had an average of £27,000 in their Chase Saver account compared to the national average for savings of £23,000. Customers were actively using round-ups, and saving an average of £13/month in spare change. Chase’s 1% cashback on everyday debit card spending has proven hugely popular with customers. Back in 2022, the top 3 transaction categories for customers earning cashback with their debit card were: grocery and supermarket shopping, restaurants and fast-food outlets, and public transport.
What sets Chase UK apart in the market?
Chase UK gained popularity due to various attractive features, including no monthly fees, fee-free spending abroad, and free cash withdrawals from foreign ATMs. New customers enjoy a 1% cashback on debit card spending for the first 12 months, capped at £15 per month. Competitive interest rates and innovative features like round-ups and a Saver Account with a 4.1% interest rate further attract users.
Managing finances is seamless with Chase UK's mobile banking app, offering up to 10 different savings accounts with the same attractive interest rate. The bank prioritizes user convenience with budgeting tools, a numberless debit card, and sustainable practices like using recycled plastic in card production.
However, some customers express a desire for face-to-face banking, citing the absence of branches, limitations on cash or cheque deposits, and the unavailability of overdraft options as areas for potential improvement.
In general, in the dynamic digital banking landscape, Chase UK stands out with its innovative features, convenience, and responsiveness to user preferences.
JPMorgan's acquisition of Nutmeg, the digital wealth manager, for £700 million in June 2021 played a crucial role in establishing a significant presence in retail banking and wealth management beyond the U.S. Nutmeg has been fully integrated into the Chase offering, allowing customers to link their investment accounts in the Chase app or sign up for Nutmeg directly in the Chase app since February 2023.
Data from May 2023 indicates a slight slowdown in customer acquisition in the UK market, with Chase UK having over 1.6 million customers and holding around £15 billion in deposits.
As for the German expansion, Chase has around 50 employees in Berlin and is anticipated to compete with providers like BayernLB subsidiary DKB, ING Deutschland, and Commerzbank subsidiary Comdirect. However, the exact launch date for Chase in Germany remains unclear.
SMARTBROKER+ Unveils Revamped Features and Cryptocurrency Plans
In December 2022, the German online broker Smartbroker announced a relaunch with a new partner, Baader Bank, which would handle custody account management and clearing accounts. End of August 2023 Smartbroker unveiled its new app including an improved trading interface under the brand name SMARTBROKER+. The improved user experience of the new platform involves streamlined digital processes, simplifying and accelerating depot opening to just a few minutes. SMARTBROKER+ is progressively rolling out features, including an expanded selection of over 2,000 free stocks and ETFs, along with 800 fee-based savings plans. Notably, the platform plans to introduce investment opportunities in 20 cryptocurrencies, such as Bitcoin and Ether, in the future. Setting SMARTBROKER+ apart is the integration of financial news, leveraging the Smartbroker Group's 25 years of online journalism experience. The goal is to closely link media and transactions, offering a unique feature in the brokerage market. SMARTBROKER+ aims to complete its product portfolio rollout in the upcoming months, with plans for additional features like sub-deposits and securities loan offers. Future developments include the integration of cryptocurrencies and specialized portfolios, expected to be introduced next year.
Smart Investing Made Simple: Monzo Introduces Multi-Asset Funds with Pocket-Change Entry
Monzo has introduced an investment feature that allows customers to invest as little as £1 in three multi-asset funds: Cautious, Balanced, and Adventurous. These funds are curated by BlackRock. The funds vary in risk and composition, ranging from 80% bonds to 100% shares. Monzo emphasizes flexibility, allowing users to modify or cancel deposits and withdraw funds without incurring charges. The fee structure, applicable to free current account holders, includes a 0.14% fund fee and a 0.45% platform fee, totaling 0.59% of the investment value. For a £1,000 investment, this amounts to 48p monthly (excluding growth or withdrawals). Plus and Premium customers enjoy a reduced platform fee of 0.35%, resulting in a £1,000 investment cost of 40p per month. Fees accumulate daily and are billed on a monthly basis.
Sneak Peek into the Future: Apple Wallet Integrates Open Banking for UK iPhone Users
Apple is quietly introducing a new iPhone Wallet app integration in the UK, powered by the Open Banking API. The trial is currently underway with an undisclosed number of users from major UK banks like Starling, Monzo, Lloyds, RBS, Barclays, and HSBC. The integration allows users to view their account balance and transaction history directly within the Apple Wallet. This information is seamlessly integrated with Apple Pay purchases, providing users with a comprehensive overview of their spending. The integration is set to roll out in the next iOS update in beta, exclusively for UK iPhone users with an Apple Pay card linked to one of the supported banks.
Redefining Cross-Border Payments Globally with Revolut RevTag
Revolut Business has unveiled 'RevTag,' an instant and free cross-border payments system designed to challenge Swift. Users can make transactions by entering the RevTag of an individual or business in the Revolut Business app, eliminating the need for IBANs or extra beneficiary details. This feature, available worldwide, enables businesses to make zero-fee payments to employees and contractors in over 150 countries and regions. Revolut Business customers can enjoy instant cross-border transactions in more than 29 currencies.
Revolut's Ambitious Move: Fintech Giant to Offer Mortgages in Europe
Revolut is gearing up to venture into the mortgage market, currently hiring for various roles to develop mortgage products in Europe. While the launch date remains undisclosed, this move aims to diversify Revolut's product portfolio as it aspires to be customers' primary financial platform. CEO Nik Storonsky envisions a 100% digital, frictionless experience, with mortgage options potentially financed by Revolut as a bank or structured similarly to a mortgage introduction. The goal is an instant and automated process within the app, allowing customers to apply for a mortgage, select a property, and receive prompt email notifications.
Low-Cost Revolution: BlackRock Invests in Upvest to Expand Retail Investor Reach
BlackRock expands its digital investment footprint in Europe with an investment in German fintech Upvest. The aim is to attract retail investors through low-cost offerings like ETFs. Upvest, a provider of trading and custody infrastructure for digital platforms, enables fractional trading across various assets, allowing investors to start with as little as €1. Notable Upvest customers include Revolut, Plum, Shares, and Vivid Money.
Scalable Expands Financial Options: Securities Loans Now Available for Austrian Clients
Scalable Capital introduces securities loans for its old customers in Austria, a standard feature for German clients but previously unavailable for many in Austria, especially those who joined after May 2022. This Lombard loan allows customers to overdraw their accounts by purchasing securities on credit, with a variable interest rate of 6.88% per annum, effectively 7.0595% annually. The maximum loan amount is currently €100,000, contingent upon the value of available securities. This offering, facilitated by partner bank Baader Bank, is comparable to similar options from brokers like Traders Place and Smartbroker Plus, both of which also partner with Baader Bank.
Trade Republic Expands Horizon: Bond Trading Now Available from Just 1 Euro
Trade Republic, the neo-broker, has expanded its services to include bond trading. Investors now have the opportunity to invest in a diverse range of over 500 government and corporate bonds, with a minimum investment starting at 1 euro. The company imposes a fee of 1 euro per trade.
German Savings Banks Eye Partnership with Payback for Girocard Rewards
German Savings banks are reportedly exploring a partnership with Payback, allowing customers to accumulate points with their Girocard. With approximately 36 million current accounts and 46 million Girocards issued, the collaboration aims to boost Girocard usage. Each Savings bank can independently decide on cooperation, emphasizing customer choice, data protection, and voluntariness, according to DSGV. Currently, Payback has no banking cooperation partner in Austria.
Beyond George suggests:
📱 Best trading apps according to Business Insider Germany (status November 2023) Have a look here
🤓 Peter Ramsay’s UX analysis of Banking Payments Read on builtformars
🎤 MoneyLIVE Payments event - 21-23 November 2023, Amsterdam See conference page
Thank you for reading Beyond George! Subscribe for free to receive new posts and support our work.