JPMorgan Chase "tests the waters": 2,200 customers participate in blockchain remittance trial

JPMorgan Chase is quietly testing blockchain technology for U.S. dollar remittances between financial centers London and Tokyo, with about 2,200 clients participating, according to a report in the Wall Street Journal.

JPMorgan hopes blockchain technology can help with currency settlements, providing faster turnaround times for clients and reducing risk for the bank, said丹尼尔•平托, head of JPMorgan's investment bank.

JPMorgan Chase may start using blockchain for real-time transactions later this year, according to reports.

The move was part of a plan unveiled by JPMorgan Chase at its annual one-day investor conference, where Chairman and CEO杰米•戴蒙Dimon will restructure the bank's budget allocations to put more money into application development and financial technology partnerships, while increasing spending on cybersecurity by 20%.

In order to reduce operating costs, banks are trying to cut expenses as much as possible. JPMorgan Chase has drastically cut expenses, laid off employees and reduced assets to adapt to a more streamlined business environment and stricter regulatory environment. Today, the rise of online loans and payment systems has gradually become a threat to traditional banking and financial institutions, including some emerging financial technology companies using Bitcoin or blockchain, so we see that large banks such as JPMorgan Chase have increased their investment in technology.

The current global economic slowdown, weak development in the energy sector and continued low interest rates have made investors worry about the impact on banks. So far this year, JPMorgan Chase's stock price has fallen 11%, while the KBW Nasdaq Bank Index, which tracks the performance of large US commercial banks, has fallen 15%. This may also be the reason why banks invest in new technologies, although technological updates cannot eliminate investor concerns in the short term.

Dimon has also become increasingly interested in blockchain technology. Last year, he said in his annual letter to shareholders:

"Hundreds of fintech startups are emerging in Silicon Valley with lots of smart minds and venture capital, and what they're doing is developing alternative technologies to replace traditional banking."

In the new blockchain initiative, JPMorgan plans to expand its testing of real transactions as soon as possible, and will conduct blockchain testing for certain corporate and investment banking clients, including some hedge funds, in the third quarter. Sanoke Viswanathan, chief administrative officer of JPMorgan's corporate and investment bank, said this. Of course, this also requires regulatory approval, which may take several months.

JPMorgan is also involved in the R3 blockchain consortium, the Linux Foundation-led Hyperledger, and the DAH blockchain project led by former JPMorgan executives.

Meanwhile, JPMorgan plans to increase its overall technology spending this year to $9.4 billion from $9.2 billion last year, according to JPMorgan's chief operating officer马特•赞姆斯. 40% of the budget is earmarked for new investments and technologies. This will include partnerships with emerging companies.

Zames said JPMorgan is cutting back on how much it spends on existing technology, including by reducing the number of locations where its technicians work, adopting lower-cost server options and reducing the number of vendors it has for legacy applications and technology services.

Original article: http://www.wsj.com/articles/one-place-jp-morgan-is-boosting-spending-fintech-1456172040
By EMILY GLAZER
Translator: printemps
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/jpm-boosting-blockchain‎)