What JPMorgan must do to gain the respect of the stock market

duty of JPMorgan Chase & Co. (JPM)’s goal is to “become the most respected financial services company in the world”. In many ways, this has “done the job”.JPMorgan is the world Largest Bank by Market Cap. it is The fifth largest bank in the world In terms of total assets – nearly $4 trillion. During the 2008 financial crisis, the US government turned to JPMorgan for help.only a few words from its silver hair Chairman and CEO Jamie Dimon Can boost the entire stock market — albeit briefly.

Yet over the past few months, JPMorgan has experienced several signs of disrespect.

· The latest episode of Disrespect appeared at the full-day investor conference last Monday (May 23) Failed to reassure investors JPMorgan plans to invest heavily in technology.

· Back in January 2022, JPMorgan shares Tank has started That’s when Dimon announced that he was abandoning his longstanding approach to cautious spending controls and would be spending heavily on technology. CEO Dimon has long been frustrated by the high valuations of fintech companies. JPMorgan’s valuation is higher than other big banks such as Bank of America or Citigroup, and it’s no consolation that JPMorgan is worth a fraction of tech stocks such as Apple and Microsoft (Figure 1).

Additionally, JPMorgan’s market cap has grown more slowly than tech giants, but even slower than the average S&P 500 company (Figure 2),

· February 2022, at meeting in floridathe major shareholder told Dimon that JPMorgan did not provide enough detail about its ambitious technology spending plans, particularly JPMorgan’s digital-only UK banking services.

· May 17, at Rare rebuke at JPMorgan shareholder meetingInvestors voted against $53 million incentive package for Dimon, contingent on JPMorgan achieving a higher market cap — a condition that means JPMorgan’s main goal is to increase shareholder value.

A failed attempt to gain investor respect

At last Monday’s investor conference, JPMorgan’s leadership team spent the day explaining JPMorgan’s investment plans. While JPMorgan’s stock price saw a one-day gain, the overall results were dismal.

Joshua Franklin in Financial Times According to the report, JPMorgan Chase estimates that overseas digital losses could exceed $1 billion in the next few years. The digital business won’t break even until 2027 or 2028, said Sanoke Viswanathan, chief executive of JPMorgan’s International Consumer Growth Initiative.However, JPMorgan will Financial Times “Expanding digital banking to other countries over time,” according to the report.

“No chance,” Explain Dimon“JPMorgan is going to have 100 branches in Mumbai, Hong Kong, London or anywhere and really compete.” In fact, JPMorgan is betting on digital because there is no other way to grow overseas.

By the end of the day, analysts remained skeptical. “The bottom line is you’re still spending a lot of money this year,” Deutsche Bank analyst Matt O’Connor told Dimon. “Are you doing too much at once?” he asked.

“We just spent the whole day trying to answer that question,” Dimon replied impatiently.

Missing answers to questions

Dimon’s obvious answer to the question was to highlight the specific difference in customers’ lives that JPMorgan’s UK digital banking service is or will make – a benefit customers don’t get from other banks. The fact that Dimon did not respond to this explains why the UK digital bank will not be profitable until 2027 or 2028.

To succeed in the digital space, JPMorgan must clearly articulate what additional benefits customers will gain from its digital banking services. Given the new digital capabilities, JPMorgan will have to rethink banking itself, not just provide more traditional banking services in digital form.

Also, in the digital age, talking about five-year profitability levels is like talking about light years. No one knows what the banking industry will look like in 2027, given how rapidly technology is changing.

What Dimon Needs (But Fails to) Say: How JPMorgan’s Digital Clients Live Differently today. The fact that no answer was given or apparently available suggests that JPMorgan has yet to grasp what it takes to succeed in tech. Simply telling a client, “We are JPMorgan – the most respected bank in the world: be a bank with us” doesn’t get the job done.

What is JPMorgan’s mission?

As a first step towards success in tech, JPMorgan can start with its mission statement. Its official mission of “becoming the most respected financial services institution” is not enough.Additionally, JPMorgan’s leadership in advancing stakeholder capitalism August 2019 Business Roundtable It turned out to be just PR.The fact that different mission statements exist Elsewhere on JPMorgan’s website Shows that JPMorgan is not really committed to any specific mission.

Sadly, JPMorgan has no sign of supporting a mission that all successful tech companies must embrace: delighting customers.

Why customer satisfaction is the key to tech success

To have any chance of success in the competitive tech world, companies must surprise their customers by exceeding their expectations, resulting in a positive emotional response, spreading word of mouth, and thereby increasing sales and profitability. Customer satisfaction—providing the same service as other companies—doesn’t produce these benefits.

To do this, companies must Commitment to customer delight from the highest levels of the company. This is not something that can be delegated. This is because delivering customer delight depends on the actions of everyone across the company.

It is imperative to discover when and where opportunities arise. This means that top-down bureaucracy must be replaced by agile networks of teams that work across organizational boundaries with the goal of pleasing customers.

Spending a lot of money on technology and new employees is not enough. JPMorgan’s current 277,000 employees must embrace and act with agile thinking.

To succeed in tech, JPMorgan has to be a different kind of company and think differently. Microsoft did it. The issue is. Can JPMorgan Chase do it?

What JPMorgan needs to gain the respect of the stock market

JPMorgan Chase and its CEO Jamie Dimon apparently have entrepreneurial success Inside Banking as we know it so far. The question is whether JPMorgan can take the next step to reshape banking for the digital age. It’s not just about offering current banking services in digital form or acquiring other digital banks. JPMorgan must rethink how to reinvent banking with the new capabilities of digital to improve customers’ lives. Buying technology and people won’t solve the problem, although it can help.More importantly, everyone in the company, from top to bottom, must learn to understand, love their customers, and address Their customer problemnot just JPM’s.

Along the way, JPMorgan may also learn that by 2022, it’s not just tech companies that have to love their customers. therefore, None of the Dow’s 30 leading companies Experiencing significant market cap growth without a customer-driven mission. So, regardless of technology, JPM’s information is critical. It’s time to shift tasks.

and read:

Why Your Mission Statement Must Include Customer First

Why Customer First is the Key to Deep Targeting Benefits