It seems like the bank that could do no wrong…finally did.
Despite the ups and downs of the market, JPMorgan’s businesses have stayed remarkably consistent. It picked up more share in trading last year than other bank and its share price also performed rivals by a wide margin.
But as JPMorgan proved this past week, it isn’t perfect. The bank said on Thursday that it was scrapping Finn, its online bank geared towards millennials, after a year. JPM has instead decided that it will focus on attracting young savers through Chase, its primary consumer brand. Existing Finn customers will be transferred to Chase accounts.
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It’s a remarkable about-face for a bank that was believed to understand millennials better then well, anyone. JPMorgan in 2016 famously cracked the credit-card code with millennials, launching the Chase Sapphire Reserve, which became an instant phenomenon and helped ignite an all-out rewards battle among credit-card companies.
When Finn launched, JPMorgan said it had designed the product “by working closely with millennials for more than a year” to understand their unique money challenges and what influences their spending.
“When it comes to money, millennials told us they don’t want to feel like they’re being judged,” said Bill Wallace, CEO of Digital at Chase said at the time. “So, we designed Finn to put them in charge, no matter where or how they’re spending.”
But solving digital banking for the younger generation proved more challenging, and Finn’s run was short-lived.
We also spoke to several Wall Street experts who said they weren’t surprised about Finn’s downfall and all voiced uncertainty around the decision to create a separate brand in the first place.
“Who is Finn? Nobody knows who it is,” Alyson Clarke, principal analyst at Forrester, told Business Insider. “It takes time to build that brand recognition and emotional connection.”
Finn also didn’t offer some of the popular benefits commonly found on other startup banking apps. The checking account earned no interest, and the rate on the savings account was poor compared to rivals. Finn only offered as much as 0.04% for customers with more than $25,000 in savings, while many digital competitors, including Goldman Sachs’ Marcus, offer in excess of 2%– 50 times more generous.
Finn’s fall offers a cautionary tale to big banks who may think they they can capture the hearts and minds of younger savers just because they have scale. Brand differentiation matters, and if Wall Street isn’t able to create something for millennials that is materially better than their core existing product, users aren’t likely to follow.
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WeWork’s CEO says the way it rents out office space makes companies’ financials look better. Some experts aren’t sure how legitimate the pitch is.
In a recent Business Insider interview, WeWork’s co-president and founder Adam Neumann said that an accounting change will make WeWork a more desirable place for potential customers to move to.
But accountants and commercial real estate executives aren’t sure that Neumann’s pitch will actually stand up to these guidelines. Instead, they said companies are more likely to switch to WeWork for culture, flexibility, and cost savings, not the accounting advantage.
Billionaire investor Stanley Druckenmiller says there should be only ‘200 or 300’ hedge funds, not thousands – and he expects a culling of the herd
The billionaire Stanley Druckenmiller told an audience Monday night that the hedge fund industry would continue to contract and that fees would continue to shrink because there were only “five to 10” people worth paying premium fees for.
Druckenmiller, who converted his hedge fund into a family office in 2010, said there should be only “200 or 300” in existence.
Rockefeller Capital expects to have almost doubled its assets to $35 billion in Greg Fleming’s first 21 months as CEO. He highlights the 2 trends shaping the industry.
Greg Fleming, the former president of Morgan Stanley and Merrill Lynch, took over Rockefeller Capital Management in March 2018, when the company had $18 billion in assets. He said on Tuesday that by year-end, the company should have about $35 billion. By 2023, he wants to hit $100 billion.
Fleming highlighted two factors reshaping wealth management: digital tools and the coming wealth transfer from baby boomers to younger generations.
Bank of America is putting the finishing touches on a 7-year cloud journey its CTO says has saved the bank billions and improved customer interactions
One of the biggest banks in the world is enjoying significant savings to its tech spend thanks in large part to its decision to build out its own private cloud.
Howard Boville, Bank of America’s chief technology officer, told Business Insider the bank will save $2.1 billion in infrastructure costs in 2019, a large part of which comes from moving a majority of its workloads from traditional on-premise servers to its private cloud.
A $10.5 billion fund at Josh Friedman’s Canyon Partners has loaded up on cash amid a shaky stock market
Canyon Partners’ $10.5 billion flagship fund has spent the last 12 months pulling back from equities and filling its portfolio with cash, according to the fund’s first quarter letter to investors.
The Los Angeles-based manager, which is run by Josh Friedman and Mitch Julis, told investors that the Value Realization’s portfolio is now nearly a fifth cash – 18%, to be exact – as of the end of the first quarter. After 2018’s first quarter, the fund’s portfolio held no cash.
“[The fund] is now characterized not only by less exposure, but also by less risky exposure,” the letter reads.
- A duo of stock pickers crushing 96% of their peers unpack their tactics for finding companies that customers can’t live without – and reveal their top picks
- The stock market will soon be without its biggest source of buying power – and its absence will make the next crash even more painful
In tech news:
- PayPal’s CFO explains what sets it apart from competitors like Stripe when it comes to dealmaking and details the 2 areas the giant payments processor is focused on
- Google Cloud’s new CEO explains why the company is paying $2.6 billion to acquire Looker, a startup that competes with Tableau and Domo
- 3 senior Facebook security workers are out amid investigations into finances and misconduct allegations
Other good stories from around the newsroom:
- CVS Health just gave a 174-slide presentation on the future of the company. Here are 8 crucial slides that show how it plans to transform the way Americans get healthcare.
- The SoftBank Vision Fund has taken Silicon Valley by storm by writing monster checks. Here are the power players there that every startup founder should know.