JPMORGAN CEO ON FINTECH: 'It's nothing mystical'

It looks like JPMorgan CEO Jamie Dimon is less worried about Silicon Valley eating Wall Street's lunch than he first let on.

In a rare, wide-ranging interview with Bloomberg, Dimon reflects on trends within finance, including the rise of so-called fintech - financial technology. Silicon Valley startups like LendingClub and PayPal's Venmo are building new finance companies that look more like social networks and app companies than traditional banks.

Dimon has commented before on the threat these types of companies pose to traditional finance, writing in a letter to investors last April that "Silicon Valley is coming." The implication was that Wall Street should man the ramparts to prepare for the upcoming attack.

But whereas Dimon's tone in that letter was one of caution and defensiveness, he strikes a more easy-going tone in the Bloomberg interview.

Talking about peer-to-peer and other online lenders Dimon says: "It's nothing mystical," adding: "Can we do something like that? Of course we can."

Here's the crucial passage from the Bloomberg interview:

Let's look at lending, where they're using big data for the credit side. And it's just credit data enhanced, by the way, which we do, too. It's nothing mystical. But they're very good at reducing the pain points. They can underwrite it quicker using-I'm just going to call it big data, for lack of a better term: "Why does it take two weeks? Why can't you do it in 15 minutes?"

For example, they might lend to one of our customers who's got a $200,000 JPMorgan Chase loan, and this person wants to get another $20,000 for a new truck or a piece of equipment. And what does he do? He goes with them, because he gets it in 15 minutes. If he goes back to the bank, he may have to go through this whole big long process for that $20,000.

Can we do something like that? Of course we can. I've asked our people, "Why don't we just put a revolver on top of our basic loan?" Make it easier for the client.

BI reported back in December that JPMorgan made clear in an internal memo that in 2016 "one of our major priorities will be to aggressively pursue the innovative technologies."

Dimon didn't elaborate on any potential innovations within JPMorgan but said the bank is willing to partner with startups where it makes sense. The bank has already announced a partnership with online lender OnDeck.

Dimon did, however, identify one area where he sees fintech companies posing a real threat to existing players - payments. Dimon says: "If you ask me, the biggest risk will be in the payment systems."

While mobile and online payments in the UK are pretty advanced, with people commonly paying each other through their banks' apps, most US banks lack this capability. This has helped spur the popularity of mobile payment apps like PayPal's Venmo.

You can read the full Jamie Dimon interview here.

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