JPMorgan Chase will maintain tech investment, despite recession
In Q2 the bank spent $2.4B on technology, communications and equipment
JPMorgan Chase will continue investing in technology in the event of a recession as its artificial intelligent (AI) capabilities monitor risk and losses, Chief Executive Jamie Dimon said today during the bank’s second-quarter earnings call.
“We spent $100 million building certain risk and fraud systems so that when we process payments on the consumer side, losses are down $100 [million] to $200 million,” Dimon said. “That’s a huge benefit … I don’t think you’d want us to stop [investing in] that because there’s a recession.”
At the JPMorgan Chase 2022 Investor Day on May 23, Chief Information Officer Lori Beer disclosed the bank’s total infrastructure spend would total $7.4 billion in 2022 including software licensing and application and production support.
In Q2, the bank invested $2.4 billion in technology, communication and equipment expenses, down 4.5% year over year but up 0.7% sequentially, according to a Q2 earnings supplement. In the first half of 2022, JPMorgan’s total tech spend sat at $4.8 billion.
During past economic downturns, the bank did not put a halt to its technology investments, Dimon said. “In a recession, certain things get cheaper, branches are enormously profitable and banks are enormously profitable … we’ve managed through recessions before, we’ll manage it again,” he added.
In addition to investments in risk reduction, JPMorgan is also automating back-end development and engineering workflows, and building out its private cloud provider, Beer previously said.
Looking ahead at the bank’s training, technology and branch investments, those areas will not suffer due to a recession, Dimon said, noting “That’s crazy, we won’t do that.”
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