JPMorgan Chase: The Real Winner of Fintech Micro-Bubble

  JPMorgan Chase: The Real Winner of Fintech Micro-Bubble JPMorgan Chase (JPM + 0,8%) is one of this week's Long Idea and original "Look Down" picks. Investors, JPM, Square, Inc. They need to see the value of their ability to leverage technology to leverage their deep competitive advantage over their peers and fintech startups like (SQ). Company's stock remains below its value, even after rising 68 % since the Long Idea report in June 2020. JPM provides the following information on the awarded quality risk / reward: - The firm is entering the fintech market at a scale that first movers will never reach. - Large cash flows feed the firm's huge fintech investment advantage and drive its fast follower strategy. - Past technology investments increase cost efficiencies, enhancing current competitive advantages. - For JPM and SQ, expectations remain fundamental. -Big Banks Will Win The "Fintech Revolution" Although the financial services industry has experienced significant innovations in recent years, most of this innovation is not as disruptive as it might seem for startups. Big banks have a structure that can be technologically more guided, have customer relations, and easily access financial resources and user data compared to small companies. The largest and best of these banks is JPMorgan Chase.

JPMorgan Chase (JPM + 0,8%) is one of this week's Long Idea and original "Look Down" picks.

  -The First One Doesn't Always Pay Those who act first in an industry can gain a great advantage technologically. However, these often start out in niche markets. As new technology is adopted, they reach larger customer base. Larger customers are thus attracted to the market (think Tesla (TSLA) versus General Motors (GM) in the electric vehicle market). Square, which first took action in facilitating small business transactions, rapidly increased its gross payment (GPV) volume from 2012 to 2020. However, being the first to enter the market and gaining market share does not mean that a business can survive. While the big banks were observing Square's rapid GPV growth, they also noticed the lack of profitability. However, despite Square's revenue doubling in 2020 and JPMorgan Chase reaching 7 % of 2020 revenue, the market looks large enough for JPMorgan Chase's entry. Also, Square's first mover advantage is almost gone. JPMorgan Chase: The Real Winner of Fintech Micro-Bubble  

Source: Forbes

 

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