It's no secret that JPMorgan Chase views competition from financial-technology startups, Big Tech firms, and mass-market retailers as an existential threat. And while the bank's response to such competition has generally resembled that of its financial peers, it's ready for a pivot.
To keep up, some firms have attempted to infuse innovation through fintech acquisitions, like Goldman Sachs' purchase of the buy now, pay later fintech GreenSky. Others have kept their fingers on the pulse of trends through venture-investing arms, like Citi Ventures and Wells Fargo Strategic Capital. JPMorgan is no exception, having gone on a spree of fintech acquisitions and partnerships since 2020 and invested significantly in technology — to the tune of $12 billion a year.
But now, the country's largest bank by assets is looking to drum up change from within. In a sweeping overhaul of its technology organization, JPMorgan is transitioning to a product operating model that will have the bank's tech organization operate more like a startup than an incumbent. And executives say the addition of 25 "mini-CEOs" who act like heads of startups within JPMorgan's tech divisions will transform the bank's approach to managing a staff of about 50,000 technologists.
This way of organizing tech teams is distinct from ones that start with underlying technology as its first principle and then work to package that into products. Instead, the product-centered approach typically starts with a customer-facing tool — be they internal or external customers of the firm — and works backward to build it. The model often syncs a company's IT efforts and its digital tech products, instead of having the two areas work in silos.
"When we think about all the successes that JPMorgan Chase has had over the last 200 years, we're now saying: 'How do we position ourselves for the long run,'" Monika Panpaliya, the head of JPMorgan's global technology-product office, told Insider. Panpaliya is leading the reorganization of the bank's worldwide tech division.
"Banks can be encumbered with legacy systems and hierarchy, but our goal — and we are using a lot of data-driven approaches to do this — is to make sure that it's a customer-centric, agile organization that we're building toward," Panpaliya added.
25 new 'mini-CEOs'
For the past few years, there have been federated efforts across the organization to operate more in sync with products, whether it was the infrastructure, security, or data team. But last year, the bank decided to harmonize the efforts across its global technology.
According to Panpaliya, this reorganization has revolved around six building blocks: JPMorgan's "product catalog" across 25 tech areas; a newfound emphasis on product, design, and engineering skills; an agile approach to tech development; a realignment of JPMorgan's budget to its products; the shared use of tech tools across the firm; and, lastly, skilling tech teams to be more adept and "mature" at product management.
Once JPMorgan identified its 25 product lines, the bank had to appoint general managers for each and prioritize them in order of which would migrate to the product operating model.
But the organizational changes won't happen overnight. Panpaliya described a multiyear effort to bring the operating model to each product line.
"This is probably a two- to three-year journey for each of them to go through," Panpaliya said.
First up are the tech enablement platforms, or the centralized teams that oversee cloud, data, artificial-intelligence, and machine-learning efforts. Since the enablement teams support all four lines of businesses, improving those team structures spurs change within businesses faster, Panpaliya said.
JPMorgan has also instituted a "cabinet" of tech advisors who sit in on quarterly reviews for each product line. The more-frequent updates have, Panpaliya said, allowed the bank to move faster in evaluating priorities each quarter.
One example has been the bank's work on private and public cloud infrastructure, where a general manager, or one of the tech organization's new "mini-CEOs," has focused efforts on determining the structure, location, and composition of cloud teams. The general managers take ownership of the products and lead the charge on incremental tweaks or strategic decisions, much in the way CEOs do for their own startups. They work closely with the underlying teams and know the product inside out.
'A lean startup kind of mindset'
Dividing a tech organization along product lines is typically an approach embraced by startups, not massive corporations like JPMorgan. But according to Panpaliya, that's what appeals to JPMorgan about the product-oriented ethos.
"As the CEO of a startup, you are constantly looking at: What is my mission, vision, and purpose for what I'm building?" Panpaliya said.
"That's exactly the mindset that we want our product managers to take, that lean startup kind of mindset," she added.
Taking a leaner approach to tech management might appeal to some JPMorgan shareholders. The bank has recently faced questions from investors over its spending on new technology, the Financial Times reported in March.
To be sure, Panpaliya said the shift in thinking hadn't come without challenges. Banks, in general, and especially those of JPMorgan's size, aren't known to be the fastest-moving organizations — which is the reason JPMorgan has embraced the new product-centric approach.
"Typically in large-scale projects, it's things like, 'Is the management team ready for such a large change? Is the organization ready for the change? How good is our change-management strategy around this? Do we have the right experts?'" Panpaliya said.
