JP Morgan to address market’s middle-office ‘inefficiencies’

JP Morgan’s investment bank chief has vowed to develop its middle-office outsourcing services along with expanding its ETF services.

Speaking at the bank’s investor day, Daniel Pinto, chief executive of JP Morgan’s Corporate and Investment Bank (CIB), said the firm is looking at new ways to increase efficiencies in the outsourcing process and create a global standard.

“Middle-office outsourcing is going to be very important. At the moment when I look at middle-office it is being done in a way that it couldn’t be any more inefficient,” said Pinto.

“I think whoever manages to simplify those processes so they are the same for asset managers and then customised around that, [that] will be the way you can provide that service in a more effective way for the clients and the bank.”

Pinto also suggested the bank will use Fintech firms to help improve the investor services unit at the bank as part of its overall technology strategy.

JP Morgan also plans to increase investment into its ETF and alternative investment platform, following a period of rapid growth in the products over the last year.

“ETFs in the next few years will probably grow around 18%, and alternatives [investments] around 9%. So they are fast growing asset classes, and we are investing heavily to improve our offering on that,” he added.

Furthermore, as part of the bank’s technology strategy, it has connected to BlackRock’s “Aladdin” platform, one of the industry’s most used risk and portfolio management systems.

By connecting to the platform run by BlackRock, which is also one of JP Morgan’s largest clients, it will be able to link up directly to its other custody clients that are connected to the platform to avoid duplication.

“As a part of that we are working with BlackRock and are integrating ourselves to their platform by connecting with Aladdin,” said Pinto.

“We are working together, and hopefully we will be able to do that with more and more asset managers in this process of modernising our infrastructure and really be able to grow.”