JPMorgan Chase recently announced the acquisition of UK-based digital wealth management platform Nutmeg.

The announcement comes six months after the Wall Street firm declared its intent to enter the U.K. retail banking market with an offering marketed under its Chase brand. These activities could signal the coming of a long-anticipated shake-up in the U.K.’s consumer banking sector, or they may become the latest in a series of developments that generate significant buzz but fail to meaningfully disrupt the status quo.

Prior to the 2008 global financial crisis, five players dominated the U.K. retail banking industry: Santander, NatWest, Barclays, HSBC, and Lloyds.

As of January 2021, those banks plus Nationwide Building Society still make up nearly 90% of the U.K. retail banking market. Over the years, competitors and challenger banks have attempted to draw customers away from the big banks: Metro Bank launched in 2010 and Virgin Money subsequently acquired Northern Rock (2012) as well as Clydesdale and Yorkshire banks (2016).

Digital banks like Monzo, Starling, and Goldman Sachs’s Marcus have not managed to capture significant market share from the industry’s incumbent leaders, either. These new entrants, as well as innovations like Open Banking and the Current Account Switching Service, were perceived as having the potential to revive competition by bringing back high-interest savings accounts and changing the face of banking as we know it. But these sweeping changes have not yet come to pass.

JPMorgan Chase will be the second major U.S. bank to enter the U.K. retail market, following Goldman Sachs introducing Marcus in 2018.

With the acquisition of Nutmeg, JPMorgan gains a well-established brand with an impressive customer base of more than 140,000 customers and £3.5 billion in assets under management. The deal also seemingly marks a new approach to launching a retail bank in the U.K. – buying a consumer investment platform and expanding it into the retail banking market.

But, the important question is whether there is room for yet another retail bank in the U.K.

Could JPMorgan Chase and Nutmeg set in motion the shake-up the industry has been anticipating for years? Only time will tell, but the latest announcement prompts several questions around the forthcoming launch, particularly on the subject of branding.

Of the three distinct brands in question (JPMorgan, Chase, and Nutmeg), each offers different implications for a retail bank launch

If indeed the bank adopts the same Chase branding as the company’s U.S. operation, how effectively will the brand translate across the Atlantic? Will the stigma of Wall Street’s role in the global financial crisis hamper Chase’s ability to earn the trust of U.K. customers? Will British consumers’ familiarity with Nutmeg give JPMorgan Chase a stronger foothold in the new market? Will the Nutmeg brand continue to exist, or will it be absorbed by the global investment banking brand of JPMorgan?

These and many other questions have yet to be answered. However, there is no doubt that the financial industry will be watching closely to see whether JPMorgan Chase and Nutmeg can disrupt the entrenched banking giants and bring about big (and, to some, long overdue) changes in the U.K. retail banking market.

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