JPMorgan On Track to Deliver $1 Billion in Value Through AI

For J.P. Morgan, and as evidenced at its investor day on Monday (May 22), a few things remain the same.

CEO Jamie Dimon will remain at the helm and said during the annual confab that “my intensity remains the same.” And when asked the timeframe of how many years there might be ahead of him as CEO, he said, a bit tongue in cheek, “three and a half.” That answer, we note, is a bit of a play off the fact that in years past, Dimon has tended to answer that he’d be in the role for the ensuing five years.

Dimon’s personal roadmap comes against a backdrop where some things certainly aren’t remaining status quo, where the bank has navigated through macro pressures and bank runs, and an environment that has been fluid, to say the least, through a pandemic and consolidation in financial services that scarcely would have been imagined three years ago.

One way to think about the “story” of the last several years, said Chief Financial Officer Jeremy Barnum, “is that systemwide deposits increased a lot as a result of QE (quantitative easing) during COVID and banks had to decide what to do with the money.”  

In J.P. Morgan’s case, he said, there’d been a net deposit inflow of roughly $800 billion through that timeframe. And part of that capital, as he noted during the presentation, has been deployed to help bring First Republic into the fold, which in turn will boost net income by about $3 billion this year.  

Technology in Focus 

The banking giant’s tech spend gives a nod to the increasing reliance on data and analytics and infrastructure modernization.

Global Chief Information Officer Lori Beer said in her presentation that the firm has been delivering new products and features “20% faster than last year.” And where the overall spending on technology stood at $14.3 billion last year, that figure will touch $15.3 billion this year, with $4 billion geared toward products and platforms.  

The company has delivered $500 million against its $1.5 billion three-year productivity target, said Beer, broken out into $300 million for engineering and labor-related efficiencies and $200 million in infrastructure productivity as the company continues to retire legacy applications. J.P. Morgan completed the migration of to the public cloud at the end of last year, she noted, with 15 releases on a weekly basis. 

AI and Real Time Payments 

Within the arena of payments functionality, and specifically within corporate and investment banking, the bank continues to target new processing capabilities and real time payments. The company has reduced the time it takes to launch a new, real time payment market from 18 months to a range of three to six months.           

“We’re ahead of our plan to deliver on our commitment to deliver $1 billion in business value through AI” this year alone, said Beer. The firm has increased its artificial intelligence and machine learning use cases by more than 34% year over year, with more than 300 use cases in production. Leveraging AI, she said during the presentation, has helped personalize products and experiences for retail customers across more than two dozen use cases, with $220 million in positive revenue impact to the firm last year.