Chase UK could massacre the competition this year

Joe Colchester Head of Product

24th January 2023 • 3min read

With the new year picking up a head of steam, it’s time to turn our attention to the trends and themes set to shape financial services in 2023. Here at 11:FS, we’re more convinced than ever that UK banks are running out of time to address their core banking issues.

In fact, it may already be too late. Recently crowned the fastest-growing fintech app of 2022, JPMorgan’s Chase UK subsidiary looks set to gazump the opposition and dominate the financial services landscape for years to come. Unless incumbents and challenger banks take serious action to compete with the US giant, it’ll be Chase’s world, and we’ll just be living in it.

UK banks chasing shadows

Having launched in the UK in September 2021, the speed at which Chase has come to carve out such a huge chunk of the retail banking market is nothing short of extraordinary. With more than 50m active customers making use of its services in the US already, Chase can now lay claim to over 1m customers on this side of the Atlantic - as of September 2022. That’s a 50% increase from May of the same year. The rate of growth is just staggering. No wonder Chase bested Revolut and Monzo in Data.ai’s list of breakout financial app downloads for 2022.

What separates Chase UK from the pack?

Chase currently offers a current account and savings account with most of the key features we’ve come to expect from UK neobanks. What distinguishes it from the competition, however, is the market-leading cashback (1% on eligible spending for the first year) and 5% on small change round-ups.

JPMorgan’s significant outlay - $450m went into the launch - is really bearing fruit from a customer standpoint. The app boasts some pretty decent UX, while offering round-the-clock customer service. In fact, the 11:FS Pulse team was so impressed with Chase UK’s straightforward design and value-adding features, we awarded it Best Incumbent in last year’s annual report. Make sure you download this year’s edition, now live!

JPMorgan’s significant outlay - $450m went into the launch - is really bearing fruit from a customer standpoint.

With a streamlined feature set at present, Chase UK is just getting started. The fintech is looking to expand into investments, bridging the gap between Nutmeg (another shrewd JPMorgan acquisition) and their current account. Investors will likely be tempted by the simplicity of this potential offering. Added to this, Chase is cherry-picking some of the best UX from other challenger banks and can roll out updates or new features much more quickly than the opposition, thanks to its core banking partnership with 10x.

While more features are on the way, the team looks set to further improve their cashback offers and remain a competitive savings product – surely a tempting proposition during the cost-of-living crisis.

And once overdrafts and cash deposits are added to its growing roster of perks, expect the fintech’s market share stranglehold to really tighten.

How has Chase found such a foothold?

Chase UK was rolled out to a lot of fanfare. The digital bank enjoyed an increase of 2.8% in Ad Awareness Score (from 5.8 to 8.6) in May 2022 - representing how many consumers have seen a brand advertisement.

They say there’s no such thing as bad press - especially when that comes in the form of a series of fawning reviews from Money Saving Expert Martin Lewis. In the throes of a cost-of-living crisis, Lewis’ reach and influence within financial services cannot be overstated.

This next point is a crucial one. Chase is not stained by the same issue of trust that weighs heavily on the shoulders of most digital banks. Prospective customers are attracted by the prestige and sheer stature of JPMorgan. There can’t be many handier allies to have in your corner.

Chase is not stained by the same issue of trust that weighs heavily on the shoulders of most digital banks.

Chase will also be encouraged by the recent Edinburgh Reforms for driving growth in the UK financial sector. According to The Telegraph: ‘The Chancellor [Jeremy Hunt] has proposed to relax ring-fencing capital rules that will boost the UK savings arms of US banks such as Goldman Sachs and JPMorgan’.

My unfiltered opinion

Unless more incumbents look at what JPMorgan has done to deliver a valuable, scalable digital product, Chase UK will massacre the competition in 2023. With deep pockets and a keen focus on expansion, we’ve reached a watershed moment in the UK fintech scene. The digital bank has the capacity to beat both the incumbent and challenger banks at their own game, with fintechs unable to compete on a cashback and savings level. The potential is dizzying. Take appropriate action to compete or prepare to step into the ring with a product that has the agility of a fintech and the resources of an incumbent.