JP Morgan backs UK funds fintech Icon Options – FinTech Futures

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JP Morgan has made an undisclosed strategic funding in Icon Options.

The UK-based fintech helps banks like JP Morgan perform their digital transformations – a course of virtually each main financial institution is at present present process.

Particularly, Icon helps banks re-invent their real-time funds and – the place it might’t get replaced – optimise their legacy structure.

“Banks are having to seek out methods of chopping prices,” says Icon

Prospects embody Citigroup, BNP Paribas, Lloyds, HSBC, and Wells Fargo.

Icon plans to make use of the funding to develop its enterprise and develop internationally.

As a part of JP Morgan’s funding, its head of digital fee options for Europe, the Center East and Africa, Sara Castelhano, will be part of Icon’s board.

Icon’s international funds options head, Simon Wilson, tells Reuters that banks have to struggle again.

“The banks are having to seek out methods of chopping prices. However with the competitors on the market they’ll’t afford to only slash and burn.

“They’re pressured to take a look at modern methods to do issues. It’s merely not sustainable to stay on the associated fee base with the outdated expertise they’ve.”

Why banks have to revamp funds

Icon revealed a whitepaper over a 12 months in the past with Aite Group which surveyed the state of funds transformation in main international banks.

Of some 22 banks surveyed, 68% mentioned they fear about shedding current purchasers or prospects in the event that they don’t innovate in funds.

While greater than two thirds of those banks had been halfway by funds transformations in September 2019. Simply 9% mentioned they had been “virtually full”.

For banks, retaining clients is paramount as revenues fall and digital challengers with competing choices proceed to emerge.

Aniruddha Maheshwari, a funds guide at Icon, told FinTech Futures in January that such sliding revenues and growing prices “threaten ‘free’ banking within the UK.”

“This commodification might have a severe knock on impact to shoppers. As establishments start to cost for providers that had been as soon as ‘free’.”

Maheshwari argues that the cloud – the expertise Icon rests on – “both limits or reduces many of those prices”.

“On a transaction foundation for instance, the cloud can deal with larger volumes at decrease prices.”

By eliminating {hardware}, software program or technical funds groups, one of many world’s international banks saved round 60% on funds transaction prices, based on a BBVA survey.