JPM Mulls Over Monetizing Client Data: Will it Alter Fintech Business?

Globe and Mail

17 hours ago

JPMorgan JPM has informed fintech firms that it will begin charging fees to access their clients' bank account details. This will likely amount to hundreds of millions of dollars in revenues for the company. This was reported by Bloomberg, citing people familiar with the matter.
The bank has sent updated pricing sheets to data aggregators that facilitate the connection between banks and fintechs like PayPal Holdings Inc. 's PYPL Venmo, Coinbase Global Inc. COIN and Robinhood Markets, Inc. HOOD. The charges will differ based on how the data is used, with higher fees for payments-focused firms. The fees, which could be implemented later this year, depending on the outcome of a Biden-era regulation, are not yet final and could be negotiated.
These charges would substantially reshape the business for fintech firms, including PayPal, Coinbase and Robinhood, which primarily rely on their access to customers' bank accounts and were able to access the same for free.
The fees could be passed from data aggregators to fintech firms like PayPal, Coinbase and Robinhood, which would ultimately pass them on to consumers. Lower-income customers will be harmed by restricted access to these platforms, given higher fees.
In some cases, JPMorgan's proposed fees would exceed the revenues certain companies earn from a single transaction by up to 10 times. JPMorgan is introducing data access fees to monetize client data, curb excessive third-party usage, and regain control amid regulatory uncertainty over open banking rules.
'We've had productive conversations and are working with the entire ecosystem to ensure we're all making the necessary investments in the infrastructure that keeps our customers safe,' a spokesperson for JPMorgan stated.
JPMorgan's Price Performance, Valuation and Estimates
JPMorgan shares have soared 19.7% this year, outperforming the S&P 500's gain of 5.9%.
From a valuation standpoint, JPM trades at a 12-month trailing price-to-tangible book (P/TB) of 3.04X, above the industry average.
The Zacks Consensus Estimate for JPMorgan's 2025 earnings implies a decline of 5.6% on a year-over-year basis, while 2026 earnings are expected to grow at a rate of 5.9%. In the past week, earnings estimates for 2025 and 2026 have been revised upward.
JPM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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JPMorgan Chase & Co. (JPM): Free Stock Analysis Report
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