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THE BRANCH LIVES, AT CHASE

Scoping out the new locations By Brian Cheung, S&P Global Market Intelligence staff writer

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s widely reported, JPMorgan Chase & Co. announced in late January it would be rechanneling proceeds from the new tax bill into 400 new Chase branches in markets where it does not have a presence. Filings with the Office of the Comptroller of the Cur renc y show Cha se proposing one branch in Boston’s Downtown Crossing neighborhood and one near Philadelphia’s Rittenhouse Square. The company also has four locations planned in the Washington, D.C., metro area: two in the city, one in the Maryland suburb of Bethesda, and another in the Virginia suburb of Arlington. By expanding into Philadelphia and D.C., Chase hopes to fill in large gaps in its mid-Atlantic footprint. The company only has branches dotted across suburbs in New Jersey and Delaware. Marty Mosby, director of bank equity strategy at Vining Sparks, said in an inter view that JPMorgan Chase w ill likely use the new branches to pursue middle-market commercial real estate and aff luent customers looking for the occasional in-person visit, adding that he does not see the company needing more

than a few branches in a city. Other analysts do not understand the strategy. Compass Point’s Isaac Boltansky wrote that the expansion seems “odd” given banking’s shift to digital platforms, noting that Citigroup, Inc., has sold its physical branches in Boston and Houston. “It will be an interesting experiment to see if branches are still a necessary tool to gain share/clients in new markets.”

The bank said it plans on expanding into a total of 15 to 20 new markets. The OCC applications also show JPMorgan Chase pursuing three branches in Nevada and California, around the Lake Tahoe area where it currently does not have any physical locations. Adapted from a longer article on BankingExchange.com. Go to tinyurl. com/thebranchlives

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nless you have been asleep for the past year, you cannot have missed the buzz around bitcoin and other cryptocurrencies like Ethereum’s Ether and Ripple’s XRP. There are even some coins that were created as a joke that are getting significant investments, such as Dogecoin. Most predict that the cryptocurrency world is a bubble and will come crashing down. I have been tracking bitcoin since 2011, and have heard over and over again from financially experienced colleagues that it is a scam, will fail, is silly, undermines the system, and will never work. Yet it does work. It enables people to trade online at a low cost and without financial inter-

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BANKING EXCHANGE

March 2018

mediaries. Here is the real concern: Bitcoin and other cr yptocurrencies could eradicate the need for banks. This is why banks keep rallying against cryptocurrencies while embracing the technologies that allow them to operate, namely the blockchain or, more correctly, distributed ledger technology (DLT). Most financial institutions are piloting Ripple, R3, Ethereum, and more because they see the savings of recording transactions on ledgers without human involvement. DLT can completely transform everything from digital identity schemes that will replace passports to digital land registries that will replace the paperbased land deeds register allowing clearing and settlement to take place

in a far more efficient structure. You have two extremes: libertarians, who are playing with digital currencies and having fun; and business and government, who are committed to transforming ledgers that need a lot of work to ones that can run using DLT, based on cryptocurrency blockchains. But the thing is, you cannot have one without the other. Therefore, the fatuous claims that bitcoin is a fraud and the cryptocurrency world is a bubble are fundamentally inaccurate when we are talking about a foundational technology that will transform planet Earth over the next decade. See a longer version of this article by fintech expert Chris Skinner on tinyurl.com/Skinneroncrypto

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Take cryptocurrency seriously

Banking Exchange March 2018  
Banking Exchange March 2018