JPMorgan's Sapphire Verification is a Matter of Granular and Surgical Growth

Since the launch of the Sapphire Reserve credit card two years ago, JPMorgan Chase has tapped into Millennials' obsession with rewards.

The company officially unveiled Thursday a product aimed at turning these well-heeled credit card customers into depositors, by unveiling a top-notch current account under the Sapphire Reserve brand with a bonus of 60,000 points.

For JPMorgan, the announcement illustrates one of the means targeted by the company – the largest by its assets – to grow. Like other major banks, JPMorgan does not have the right to buy another bank because of its size and its market share of deposits. In addition, banking and finance are not very present in banking and finance ($ 2.6 billion).

According to financial director Marianne Lake, growth involves finding "granular and surgical" means to increase market share and attract lucrative customers.

"Sapphire Banking is a great example," said Lake at an investor conference in New York on Thursday.

Under the new Sapphire bank account, clients are required to maintain a minimum of $ 75,000 in eligible deposits or investments. In return, they do not pay any fees for ATMs, bank transfers or other banking services. They also enjoy a series of special benefits for concerts and sporting events, advance ticket sales, access to Sapphire lounges and upscale seating.

"The opportunity is to create better interoperability between companies, products and channels," she said. While it remains to be seen how many customers are opening Sapphire bank accounts, "it's very important to us because we've taken this incredible cohort of clients we've talked a lot about, and we're going to deepen our relationship with them. . "

During the conference, sponsored by Barclays, Lake also discussed the company's updated projections for its 2018 results.

In particular, she said net interest income is expected to be about $ 55.5 billion this year, up from the company's previous forecast of $ 54 billion to $ 55 billion.

One of the main reasons for this increase is that deposit rates have not increased as much as expected by JPMorgan. As clients begin to demand higher deposit rates in the future, rates are only part of what they are looking for in choosing a primary bank, said Lake.

"I think prices will only play a role," she said. "If you are someone who thinks the value proposition of being a Sapphire Banking customer is really good for you, then the price will be important, but so will all the other things that bring you value. "

In addition, Mr. Lake said the fees, which are expected to increase by 7% over the previous year, are expected to increase by "one percentage point" thanks to commercial bank and investment fees since the beginning of the year. 'year.

Expenditures, meanwhile, are also expected to increase slightly to $ 63.5 billion, driven by transaction costs, broker clearing and performance incentives.