As it reported record profits last year, JP Morgan stunned analysts with a forecast that expenses would increase by 8% in 2022 to around USD 77 billion, meaning it would probably miss a key profitability target in 2022, and possibly in 2023.
Part of the elevated expenses are from higher pay, with an extra USD 2.5 billion earmarked for compensation and travel expenses. But JP Morgan also said it planned to increase new investments this year by USD 3.5 billion, or 30%, to almost USD 15 billion. Therefore, technology spending in 2022 will hit USD 12 billion, it said.
The big spending reflects the pressure on banks to compete with financial technology companies like payments processor Stripe, instalment lender Affirm, and challenger bank Chime.
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