JPMorgan Chase & Co said it had hired and would take a stake in InvestCloud, which provides software that makes online transactions easier for customers with banking and investment accounts.
Continue Reading Below
The biggest U.S. bank by assets, JPMorgan did not disclose the amount of the stake in an announcement prepared for release on Tuesday and which Reuters saw.
The investment reflects Chief Executive Officer Jamie Dimon's response to threats from new Silicon Valley companies, which he said in 2015 were coming to disrupt JPMorgan's business. Rather than vowing to block upstarts, Dimon has chosen to embrace those with technology that provides better customer service at lower costs.
JPMorgan is competing with other banks and money managers to meet customers' rising expectations for easy but secure ways to keep up with their affairs, anywhere and anytime.
The InvestCloud deal is also part of Dimon's commitment to spend $300 million over the next three years on digital improvements in asset management.
Starting early next year, the bank will use InvestCloud to customize website dashboards and mobile apps for clients ranging from individuals with investments of $1,000 to managers of family investment offices with $1 billion or more.
Over time, the tools will become more refined for people who make their own trading decisions, people who only check managed accounts, and people who manage part and hire out the rest.
Compared with the costly slog of traditional programming, InvestCloud says it offers thousands of "lightweight applets" that can be configured within days rather than months.
The company started selling products in 2012. It has 660 institutions using its tools in support of $1.5 trillion of assets, according to the announcement.
In the announcement, Dimon cited InvestCloud's "record of driving innovation for its institutional clients" as a reason for making the deal.
Since December, JPMorgan has struck deals with financial technology companies including OnDeck, which provides systems to speed small business lending; Virtu Financial Inc, which handles electronic trading in U.S. Treasuries; and TrueCar Inc, which provides online car shopping services.
Kelli Keough, JPMorgan's global head of digital wealth management, said in an interview that she expected to sign additional financial technology companies.
"We are exploring with a range of vendors," she said. "It allows us to get to market faster and bring in innovation."
(Reporting by David Henry in New York; Editing by Lisa Von Ahn)