The biggest U.S. banks are ramping up investments in some of their potential competitors.
on Monday that it was rolling out free same-day deposits to customers of its WePay platform who have bank accounts with the firm. It has also gone the partnership route, working with fintech firms like OnDeck, and has used its own engineers to build solutions like the brokerage app YouInvest.a "new fintech campus" for more than 1,000 employees in Palo Alto, California.
"This is helping them diversify the overall business," Hsiao told CNBC in a phone interview. "We fit a certain product set, and can underpin all of J.P. Morgan's small business merchant payments, which could be a big future revenue generator." Bank analyst Dick Bove, who joined Odeon Capital Group earlier this year, said bank profits should still hold up despite falling Fed Funds rates. Bove is less convinced that bets on fintech will immediately impact banks' bottom lines, but said Wall Street will continue to look to its smaller competitors for ideas.
Wells Fargo's Mike Mayo said even if banks wanted to, regulation might prevent them from leaning too heavily on venture capital. The Volcker Rule, one post-financial-crisis reform, limits some banks from making speculative venture capital investments. And some are just wary after Dot Com bubble failures, Mayo said.
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