“Silicon Valley is coming.”
— Jamie Dimon, chairman and CEO of JPMorgan, in a letter to shareholders this week.
He was warning about startups trying to upend the traditional banking industry, including Lending Club, which matches individual and institutional lenders with borrowers. The San Francisco startup went public in December. Other tech companies in the business of lending money include Square and PayPal.
“There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking,” Dimon wrote.
Dimon also addressed the banking industry’s “critical” business of payments, and noted the competition: The aforementioned PayPal, and bitcoin. Some other fairly new payments providers we have written about include Stripe, which has helped drive Apple Pay’s success, Snapchat with its Snapcash service, and even Facebook, which is letting users send money through its Messenger app.
“There is much for us to learn in terms of real-time systems, better encryption techniques, and reduction of costs and ‘pain points’ for customers,” Dimon said.
Photo: Renaud Laplanche, third from right, founder and CEO of Lending Club, embraces CFO Carrie Dolan during opening bell ceremonies of the New York Stock Exchange to mark Lending Club’s IPO, Dec. 11, 2014. (Richard Drew/Associated Press)