JPMorgan spends $11 billion on technology. But a top exec at the giant bank says its clients don't want it to be a tech company.

Hollis Johnson/Business Insider

Huw Richards is JPMorgan's head of digital banking.

• JPMorgan spends more than $11 billion on technology annually, but its clients still want the firm to be a bank, not a tech company, said Huw Richards, the bank's head of digital investment banking.
• "They want us to be a technology-enabled partner," he said on a panel on Monday at Business Insider's IGNITION Finance event at the New York Stock Exchange.
• For more stories like this, visit Business Insider's homepage.

The feel of a tech company, the trust of a bank. That's the tricky intersection Wall Street firms are trying to land in as they remake their businesses.

But despite spending billion on technology upgrades ranging from fintech partners to blockchain initiatives, JPMorgan clients don't want the firm to be a tech company, Huw Richards, the bank's head of digital investment banking, said on Monday.

Instead, clients are looking for "a technology-enabled partner," said Richards, who was speaking at Business Insider's IGNITION Finance event at the New York Stock Exchange.

"Businesses have to change themselves, businesses have to disrupt themselves," Richards said. "Technology is just a tool for the cultural change we are trying to get to."

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Richards' statements ran counter to what some of Wall Street's biggest names - including JPMorgan's former CFO and current consumer lending CEO Marianne Lake - have said. Goldman Sachs former CEO Lloyd Blankfein, BlackRock CEO Larry Fink, and Lake have all called their firms tech companies.

And JPMorgan has made the biggest investment into tech of them all, with Wall Street's biggest tech budget of more than $11 billion this year. Richards said Monday that the bank has more than 50,000 technologists.

While Richards may not think that clients want his bank to be a tech company, people want to engage with their banks like they engage with tech platforms such as Google and Amazon without sacrificing any security, said Lucien Foster, BNY's head of digital partnerships.

"They don't want us to move fast and break things," said Foster about clients' expectations from a bank.

Hollis Johnson/Business Insider

Lucien Foster is in charge of digital partnerships at BNY.

"It is an order of just balancing" customer experience and security.

For now, Richards' clients want JPMorgan to be a bank, but a bank that is fluent in all things technology.

"In 2022 to 2023, our technology insight will become a core part of our advice to our clients, in addition to our traditional investment banking insights," he said.

How they pick their partners

Both Richards and Foster are in charge of deciding whether to build, buy, or partner with outside firms as they tackle their firms' technology problems. For fintechs looking to break into a massive financial institutions, the two executives laid out how they evaluate potential partners.

Richards said when JPMorgan is thinking about partnering with a fintech company, he looks for a company that is ready for the "ruthless execution" stage.

"We are now, as an industry, well through the strategy phase. We understand what our problems are, we've spent a lot of time thinking about them," he said. "We're into ruthless execution."

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The potential partners that move on at JPMorgan come with a "differentiated technical insight" into how to solve the problems the bank has identified, he said, along with key components that he and Foster said are requirements for partners: a track record; cultural fit; understanding the firms' niche businesses.

But just understanding that a problem like data usage exists is not enough to partner with JPMorgan. Prospective partners need to show how they can solve it.

"That's where we are on the cycle, and for people that come in and recognize that, we move incredibly fast," Richards said.

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