JPMorgan's No. 2 explains how the fintech threat made the nation's largest bank even bigger

• JPMorgan Chase, the nation's largest bank by assets, is getting bigger every day.
• The bank's second-in-command said the fintech threat is driving some of its expansion plans.

Jamie Dimon's war against fintechs is well documented. The outspoken CEO of JPMorgan Chase has made no secret of his plan to beat financial startups at their own game, an ambition that has led to more than a dozen fintech acquisitions in the last three years.

On Friday, Dimon's No. 2, Daniel Pinto, suggested that the looming fintech threat is also responsible for JPMorgan's retail banking expansion in Europe.

"In the past, we always said, 'There is no way that we are going to do retail outside the United States," Pinto told the Bernstein Strategic Decisions conference. Pinto went on to explain that "the retail business in the United States is an amazing business, very profitable, massive scale, great set of products, very good," according to a transcript of the remarks provided by financial information services company Sentieo.

"But you never know when it could be disrupted by someone, by the technology platform and someone else," Pinto added. "So we see this as a way over the long, long term to diversify and complement our fantastic US retail business."

JPMorgan went beyond US banking border for the first time ever in late 2021 with a digital-only retail banking offering in the UK. Germany is next, according to Bloomberg, and the bank is only expected to continue expanding from there, including potentially to Latin America.

The comments come as JPMorgan continues to wage war on financial technology startups. The bank has made at least 16 fintech or consumer-focused acquisitions since 2020. It plans to spend $15.3 billion on tech in 2023, up $14 billion from last year.

Pinto said the bank expects to make even more acquisitions and to continue to spend on tech as it seeks to keep its competitive edge across business lines.

"I will say that technology transformation modernization is the most important thing that this company has to do, without a doubt. And we are somewhere along that journey," he said.

He acknowledged that the bank's plan to spend $15 billion on tech "is a lot of money," but said the budget "is really allowing us to scale without extra cost."

The bank's efficiencies "will improve as we move a lot of our applications to the new data centers, a lot of our applications to the cloud. So this is something that there is no choice. You have to do it ... it's crucial for the future of the company."

Pinto also said the bank is always open to filling in gaps through acquisitions.

"We realize that if we ended up buying a particular company, it will accelerate our go-to-market or will bring certain technology that we don't have — or certain client base that we don't have."

Last month, JPMorgan agreed to pay about $10.6 billion to buy First Republic Bank after the smaller bank was seized by regulators.