J.P. Morgan Chase, the largest bank in the world by market cap, has announced it would acquire the UK based robo-advisor Nutmeg. The move comes as the bank attempts to gain a stronger foothold in the UK retail banking sector by investing in digital offerings.
Nutmeg currently manages $4.9 billion in assets for its customers, and that number has grown by 70% when compared to last year. JPMorgan has yet to decide whether it will roll Nutmeg into its own offerings or continue to offer it under an independent brand; however, it has made the decision to leave the current leadership team in place to guide the company.
The acquisition may also be part of JPMorgan CEO Jamie Dimon’s commitment to being more aggressive when it comes to making acquisitions after Morgan Stanley acquired E-Trade and Eaton Vance.
He has also been increasingly critical of the lack of regulation of fintech companies and warned investors of the threat they pose to JPMorgan. So, acquiring one of the fastest growing fintech players in the UK may be part of a broader plan to mitigate the risk they pose to his bank’s competitive positioning.