JPMorgan Chase plans to invest over $12 billion in technology throughout 2022, contributing to an eight percent rise in expenses that may impact the bank’s profitability targets.
In its fourth quarter report, JPMorgan outlined its technology spending strategy, which will utilize “microservices architecture, cloud computing, and modern engineering practices to expedite software development.” The bank is making significant investments in AI and machine learning to enhance data utilization, while also emphasizing its commitment to cybersecurity.
Additionally, JPMorgan intends to pursue further acquisitions, building on its recent purchases of OpenInvest, Nutmeg, and a 75% stake in VW Payments.
With a competitive job market for tech talent, JPMorgan is revamping its approach to attract and retain top technology professionals.
James Shanahan, an analyst at Edward Jones, remarked to the Financial Times that the bank’s $12 billion technology expenditure is an “astonishing number” that likely exceeds the collective investments made by all fintech companies attempting to challenge them.
However, the bank cautioned that its rising expenses may adversely affect its return on tangible capital equity, leading to a decline in its share price and prompting Wells Fargo analyst Mike Mayo to downgrade its stock.