[ad_1]
Eric Platt quoted Jamie Dimon, chief executive of JPMorgan Chase & Co. (NYSE: JPM), in a recent Financial Times article:
"…Health care [is] one of the most difficult, the most complicated [problems]but we know that we can do something to improve the functioning of the system. "
So why is Mr. Dimon taking JPMorgan farther into this space?
JPMorgan Chase agreed Friday to buy health care payments and an InstaMed billing processor for more than $ 500 million, the bank's largest acquisition since the peak of the financial crisis, according to a person familiar with the problem. good the case. "
This is the largest acquisition of the bank since its acquisition of investment bank Bear Stearns and Washington Mutual's retail banking assets in 2008.
Commitment is not only interesting, but JPMorgan stresses its importance because it is ready to commit itself to this agreement.
The agreement will strengthen the bank's payments division and propel it into what it calls one of the most dynamic areas of money transfer in the financial system.
At present, the bank already processes more than $ 6 trillion worth of payments a day.
InstaMed is a healthcare payment network based in Philadelphia.
And, the term network is key because this network connects providers, payers and consumers on one platform.
This platform will extend the payment services portfolio under the umbrella of JPMorgan and expand the links that the bank now provides.
The agreement gives JPMorgan the opportunity to add a new specialty business to its wholesale payments business, which the bank has gradually developed over the last few years.
Over the next decade, this space should at least double because it connects hospitals, doctors' offices, insurers and patients.
InstaMed processed nearly $ 100 billion in health care payments in 2018.
Mr. Dimon and JPMorgan are quickly using the bank as a "new" modern society, an organization whose foundation is information technology and whose business model is built around platforms and platforms. networks.
Mr. Dimon has made the bank one of the leaders of the movement in order to become a "new" modern society, a company drawing lessons from big tech giants such as Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN).
But Mr. Dimon and JPMorgan do not do it alone.
The current effort is a consequence of the creation of a new health care company called Haven, created earlier this year.
One of the technology partners, Amazon, and the investment conglomerate led by Warren Buffett, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).
Haven's specific goal is to reduce annual health care costs for approximately three million employees in all three groups.
However, there are obviously other consequences of this combination,
For me, one of the most important "other consequences" is to introduce JPMorgan into the real world of the "new" modern society.
I've written a lot about the "new" modern society over the past six to nine months and I firmly believe that this model of society is becoming the foundation of the new era's corporation.
As mentioned above, the "new" modern society is based on intellectual capital and is a multidimensional model, unlike the linear model that it replaces. A linear business model simply connects a product or business service to a customer. It's just one-dimensional.
The "new" model is multidimensional, in that it connects many different endpoints and allows them to interact in one way or another.
The commercial bank seems to be a natural model for such a model, because finance is nothing more than information, nothing more than "ones" and "zeros".
However, banks have in the past focused on the linear relationship between depositors and the bank, between borrowers and the bank and between customers requiring specific services and the bank. And if banks stay on track, they will lag behind others, even high-tech companies, in their ability to become the financial institution of tomorrow.
The goal of this new era in the banking sector is the payment system. Note that between PayPal (NASDAQ: PYPL), Apple Pay and Amazon Pay, this advanced technology has already discovered the central role of the payment system as the heart of the commercial banking platform.
That's what Mr. Dimon and others are focusing on among the big banks. And in doing so, they seek to access all the economic benefits of this type of organizational framework. The economic benefits of the "new" modern society include the easy realization of scale and the possibility of reaching a massive scale with zero or near zero marginal costs.
This framework is what the new era is built on.
Commercial banks are not leaders in this direction, but with Jamie Dimon and JPMorgan Chase to lead the way, they are now accelerating their pace.
I think this is the kind of effort that investors should look for to find value in the financial field. Unfortunately, it is the big banks that will benefit from this transition, mainly because of the importance given to scale.
Recent efforts to combine BB & T and SunTrust banks are indications of this interest.
This gesture by JPMorgan Chase seems to indicate that there will be a lot more interesting information to follow.
Disclosure: I / we have / we have no position in the actions mentioned, and we do not intend to initiate a position within the next 72 hours. I have written this article myself and it expresses my own opinions. I do not receive compensation for this (other than Seeking Alpha). I do not have any business relationship with a company whose shares are mentioned in this article.
[ad_2]
Source link