SIBOS 2020: ‘We were unprepared’, J.P. Morgan CEO says in keynote

By Sunniva Kolostyak

The world was ‘unprepared’ for Covid-19, J.P. Morgan Chase’s James Dimon said at SIBOS 2020, noting that the pandemic has highlighted several flaws in how the US has been run.

In the opening keynote, Jamie Dimon, Chairman and CEO of J.P. Morgan Chase & Co., spoke to Takis Georgakopoulos, Head of Wholesale Payments, Corporate & Investment Bank at J.P. Morgan, about the effects of Covid-19, the state of the banking industry, technology and social responsibility.

“We were unprepared. I’m not blaming any administration, I mean the world was unprepared and we should have been prepared,” Dimon said. “In my view, Covid just highlights so many flaws in how we run, I’m talking about our country, the mistakes we make in running our country and how it hurts so many people.

However, a lot of companies were able to respond quickly, implementing technologies to allow seamless work-from-home models – a good example of how quickly the financial industry is able to move if needed.

“I think the banks were really good – they can all go work from home, and they all serve their clients. A lot of you know this but April, May, June, July, August was the most active months we’ve ever had, in almost all of our businesses. Processing money, I think we had $9 trillion in one day, which is 50 per cent higher than the norm. Biggest bond issuance months, biggest trading months, biggest investment banking months.” the industry veteran said.

However, Dimon does not believe most people will continue working form home on a permanent basis, as companies are missing out on spontaneous creativity and younger employees are not receiving sufficient training.

On the emergence of different technologies, he added that cloud is critical, AI and machine learning should be used by every management team, and blockchain is a ‘very complicated technology’ which should be rolled out by use case.

When asked about the emergence of FinTech and digital payments systems, Dimon said the success of PayPal, Alipay and Shopify has come from removing pain points and creating simpler customer journeys.

“If you look at a lot of their products and services, they’re not cheaper. They’re not safer. They’re not better, per se, but they get rid of those pain points,” he said.

“I always say, banks were good at creating pain points. How can we talk to our clients a little bit more, with another form or another document, and we didn’t always think through about making easier, faster, quicker, better, cheaper – which we’re doing a much better job and now. […] We got to do more of it, speed, speed, speed, speed, speed, knock out that bureaucracy, it’s the opposite of speed, and the opposite of transparency.”

Taking both a micro and macro approach to sustainability, the J.P. Morgan Chase boss added that companies often go to the government to fight for little things that are good for them but put the country in a worse state.

“I tell CEOs that if you can get the economy to grow not 2 per cent but 3 per cent, that will be far more impactful for their company than all those little tidbits they’re fighting for in Congress, all of them combined. And so, I think it just makes sense to get involved, roll up your sleeves. I do not believe government can do it by itself. Government needs to work with business and vice versa.”

Also commenting on diversity and inclusion, Dimon said the murder of George Floyd shines a spotlight on racial inequality, which the US has not done a good job at fixing or acknowledging. This is amplified by poor people suffering more during a crisis.

He said: “The black community had been left behind for a long time, and a lot of it was structural – jobs, education, or stuff like that.”

“My big frustration is the things that we need to do to fix it. J.P. Morgan is doubling down advancing black pathways and, and I want all of our citizens – I don’t care if you’re Muslim, Asian, gay, black, woman, a shy man – I want you all to feel treated with respect at this company, and you got to fight for the black community. It’s been a long time, they’ve been more disconnected from the white world a little bit and acknowledging that is a good thing to do.”