Dubai - JPMorgan Chase chief executive Jamie Dimon sees challenges from companies such as Facebook and Google as they seek to provide online banking and money-sending services.
“We move $10 trillion a day,” Dimon said today at the Euromoney Saudi Arabia conference in Riyadh.
“We’re one of the largest payments systems in the world. We’re going to have competition from Google and Facebook and somebody else.”
Companies are competing for a share of the global electronic payments market worth as much as $1.8 trillion a year, according to Capgemini’s 2013 World Payments report.
Google created Wallet, a system using smartphones, and Facebook is seeking regulatory approval in Ireland for a service to allow users to store money on the site, the Financial Times reported last month without saying where it got the information.
Dimon said regulators must decide whether they should oversee such companies providing financial services.
“There’s no way that Google wants to be a regulated bank,” he said.
Cupertino-based Apple, which has more than 400 million credit cards on file at its iTunes Store, is exploring an expansion of the mobile-payments system, a person with knowledge of the matter said in January.
PayPal, the online payments system owned by EBay, contributes nearly 40 percent of the San Jose-based e-commerce company’s revenue, data compiled by Bloomberg show.
JP Morgan will continue to compete in the industry as competition increases, Dimon said.
“We are devoted to making it easier to move money and authenticate who you are, reduce fraud. We are going to compete and we have a lot of experts in big data and online things.”
Dimon also said competition from non-banking financial institutions was on the rise as lenders face strict capital requirements globally.
In the so-called shadow banking system, specialised lenders, money-market funds and other financial institutions offer services similar to banks in a less-regulated environment, he said.
“As banks have to have more capital liquidity, that it will push things to that segment,” Dimon said.
“There’s nothing wrong with that.”
JP Morgan warned on Monday that a deepening trading slump may last through the second quarter.
Fixed-income and equities trading revenue will decline about 20 percent from last year’s second quarter, the New York-based lender said in a regulatory filing after the market closed last week.
The bank blamed “a continued challenging environment and lower client activity levels.” - Bloomberg News