Jamie Dimon, the JPMorgan Chase CEO and chairman, will visit Seattle on Wednesday, which happens to be a key date in the financial services giant’s history with the city. Eleven years ago, on Sept. 25, 2008, JPMorgan Chase took over Seattle’s hometown Washington Mutual Bank in the fallout from the financial crisis.
“We know the suffering it causes a city when it loses a headquarters,” Dimon said when GeekWire mentioned the anniversary in an interview this week, citing it as one of the reasons the company feels especially committed to its Seattle operations.
It also doesn’t hurt that the region is a hotbed for tech talent. In his appearance at JPMorgan Chase’s annual Women on the Move Leadership Day today, Dimon is expected to outline plans to double the company’s Seattle cloud engineering center to 200 people by the end of the year, and again to 400 people by 2022.
JPMorgan Chase will also announce a $500,000 grant to Seattle Colleges to support women and students of color pursuing technology careers, starting in the ninth grade, partnering with Seattle Public Schools and Computing for All.
The company opened the Seattle engineering center last year, part of a wave of corporate giants placing key tech outposts in the city. The company’s Seattle engineering group focuses on its work with the major public clouds, Amazon Web Services, Microsoft Azure and Google Cloud, as well as the bank’s own private cloud platform. It also includes a growing cybersecurity team.
In advance of his visit, before getting publicly roped into the latest WeWork plot twist, Dimon spoke with GeekWire via phone about the future of artificial intelligence in the financial sector; what he has learned from Amazon CEO Jeff Bezos; and what made him change his mind about the cloud.
Continue reading for edited excerpts.
Todd Bishop: How do the cloud, AI and this Seattle engineering center fit into JPMorgan Chase’s larger strategy?
Jamie Dimon: The cloud and AI are real, huge, powerful and they’re going to change a lot for us. Of course, good companies are going to adapt to it in due course. They can’t just do it overnight, but it changes a lot more than just using the cloud — how you write your code, how you can do agile, it even changes how you organize your company. Managers start to think about using data in a far different way than they ever did before. It changes everything. It’s a huge opportunity.
TB: Why should engineers choose a company like JPMorgan Chase versus a hot startup or Amazon, Microsoft, Google?
Dimon: Forget the common perception of banks. Banks are involved in almost everything important going on around the world. We help develop companies. We own a piece of 100 different companies in technology, including fintech, cloud, cyber. We’re at the forefront of a lot of this stuff as a user. We develop communities, companies, people, and if you’re a developer, you’re going to see the stuff you do immediately affecting 50 million households. We move $6 trillion a day around the world. We’re at the forefront of using blockchain for real purposes, with the JPMorgan Interbank Information Network. We’re a really interesting place with great people who can make a real difference. Just as much as a difference as you can make at any one of those other companies.
TB: Long ago, you said the cloud was just another form of outsourcing. I’ve read your most recent shareholder letter, so I know you’ve since changed your mind. What changed?
Dimon: Well, first of all, I admitted that a long time ago. [Laughs.] That wasn’t just last year. Look, I’m not against outsourcing. We outsource energy, we outsource computer making. I’m also in favor of having a lot of people here who know our company in detail, our clients in detail. As you know, a lot of application development work has got to be done on the trading desk. It’s got to be done facing a customer, and some of it is quite proprietary. We run 7,000 applications. I’m the guy that took back all of the outsourcing that this company had done everywhere, to our own patriots who are smart as hell and they work with all our clients and our people. When cloud first got started, there was no reason to use someone else’s data center or their networks. You know, I wasn’t completely wrong, if I can run my data center as efficiently as a cloud guy, which fundamentally is true.
But here’s what I missed: the bursting part of the cloud. It reduces the peak capacity that we’ve got to keep in our own data centers, and you can burst excess workloads into the cloud. And it directly relates to AI. There’s just so much compute power in one split second that I simply can’t do in one of my data centers. So if you want to apply AI and these tools, and also the services that are built into some of these platforms [the cloud offers an advantage.] I worry about the proprietary part, but they’re already built. So the combination of compute power and AI, In some ways it’s even safer for cybersecurity. If you look at it in detail there’s some additional cyber risks, but there’s also in some ways more business resiliency.
So if you look at the whole shebang, yeah, it’s pretty powerful stuff. We’re building an internal cloud, a private cloud, and a public cloud, so that our applications can be developed ready for both, to move to either, and also you can divide workloads in pieces. … So there are a million ways you can manage this but we realized a long time ago that we should have spent a little more time studying it and understanding how it actually works.
TB: It seems like, because of the ways that banks are regulated, in some ways, you’re farther along than some of these tech companies that are grappling with regulatory pressure for the first time. Are you in a better place to innovate because you know where the guardrails are?
Dimon: A little bit. I look at it a little bit differently, which is, obviously we have to put incoming cloud people through what we call third-party oversight. They thought we were a little crazy, but as it turned out, we need those guardrails, for us, not for regulators. It’s about protecting the company, and the clients. But it is true that regulations create a lot of complexity for people, and obviously if you can navigate that, you can do certain things faster. But very rarely is it going to stop a fintech competitor. I think it’s a reason someone may not want to be regulated as a bank.
TB: You’re coming into Jeff Bezos’ backyard here, and I know you have a relationship with him both personally and professionally. Including the healthcare joint venture that you’re doing with Amazon and Berkshire Hathaway. What’s the biggest lesson you’ve taken from Jeff Bezos over the years?
Dimon: Look, I have enormous respect for him. I mean, enormous respect. I think he’s one of the great thinkers, and he’s fun to be with, and he’s smart as hell, and he’s not arrogant about it. You always learn when you talk to Jeff. He and I hit it off. But it’s funny, a lot of the lessons are the same. Certain decisions, he calls them a one-way door vs. two-way. I used to always say, there are certain decisions you can make slowly, and certain decisions you can make quick. I always meant the same thing, so a lot of common stuff like that.
I love to test and learn and fail quick. You want the people at the table who work with you to be able to say, “Jamie, that’s just not right.” It’s not offensive to tell the CEO that; it’s part of the learning process. You’ve seen him start a lot of things and stop them when they didn’t work. He says, you know what, they weren’t failures, I learned from them, and I think that’s what you want your people to do. You learn a lot and your people get really good. So the future is based on stuff you learn, often from failure — what people call failure, as opposed to testing.
TB: When you look at the future of banking, of financial services, how do you expect the cloud and artificial intelligence to change things?
Dimon: There are things that are not going to change. You’re still going to need, whether you’re a consumer or a corporation, advice around certain subjects: organization, markets, governance, whatever that is, your own financial affairs, retirement planning. People are still going to need advice and help. You’re still going to need to move money. You’re still going to need to raise capital around the world. You’re still going to need to hedge your exposures. You’re still going to need to explore M&A in a million different ways and get advice. That’s all the same. What will happen on the other side is it will be delivered differently.
This has been going on my whole life, by the way. When I grew up, to buy a share of stock. you made a phone call. Then they called down to the stock exchange floor, and five days later, it settled, a lot of errors, and now you can do it on your phone. And it can be done by algorithms. You tell them how you want to do it. … It’s always becoming cheaper. That will continue. Cheaper, better, faster, integrated. AI will be part of the journey. The easiest parts are obviously risk, fraud, underwriting. AI will be enormous. It will be enormous for idea generation. It will take care of errors. … I could go on and on and on about the complexities it raises, the opportunities it raises.
At the end of the day, and this is where Jeff and I are the same, too, it’s about what does a better job for your customer. It’s not about what does a better job for JPMorgan Chase. We just have to find a way to make that work for us, too.