JPMorgan Chase & Co. would like the world to know it’s not just in the business of making loans, taking deposits and navigating the waters of high finance. With the launch Thursday of the JPMorgan Chase Institute, the bank adds a new facet to its brand: think tank.
The institute aims to use real-time big-data analytics for the benefit of policymakers, businesses and the wider public. JPMorgan CEO Jamie Dimon has said the think tank is out to “educate the world.”
As its inaugural report’s conclusions show, perhaps unsurprisingly, the greater good might just be served through Chase’s own banking products.
The institute isn't your typical corporate stab at social responsibility. It has access to a uniquely vast trove of customer data: Chase’s checking and savings accounts. Moored to the largest American bank by assets, the think tank says it can put "the broad spectrum of data within the firm to use for the public good.”
The institute's opening comes as major financial institutions try to burnish public reputations still damaged from the fallout of the financial crisis and subsequent scandals. Just a day before the JPMorgan Chase Institute announced itself to the world, the bank pleaded guilty, with several other firms, to criminal antitrust violations related to foreign exchange rigging.
In its first publication, the institute measured the volatility of Americans’ personal finances, using data culled from 100,000 Chase customers’ bank accounts, credit card records, mortgages and home equity loans. According to the institute, the data was stripped of personally identifiable information.
In their most salient finding, the authors wrote that the average household didn’t have the savings necessary to withstand the unpredictable ups and downs in personal income and consumption.
The researchers estimated that the typical household needs a cushion of $4,800 to withstand unexpected financial blows, like a medical bill or sudden job loss. The average family, however, falls $1,800 short of that mark.
“A financial buffer is a more important consideration for individuals across the entire income spectrum than is generally understood,” the authors wrote.
But the recommendations outlined at the end of the report might sound familiar to Chase employees, some of whom contributed to the research. According to the authors, solutions could include “new savings, insurance and credit products,” as well as more technical banking tools -- many of which Chase already offers.
In a letter celebrating the opening of the institute, Dimon emphasized the way the company and think tank could work together toward similar ends. “The private sector has a role to play in addressing big societal challenges such as economic opportunity.”