Why Chase Bank’s CEO Loves Branches, Admires Bezos & Questions Facebook

The CEO of the biggest bank in America commands attention whenever he speaks or writes — both of which he does frequently. Dig beyond the headlines, however, and Jamie Dimon's comments on banking trends, management, and his own amazing story yield nuggets of gold every banking executive should know about.

Jamie Dimon is the closest thing to an industry statesman that banking has today. The long and detailed annual report letters of the Chairman and CEO of JPMorgan Chase are picked over almost as minutely as those of Berkshire Hathaway’s Warren Buffet and Amazon’s Jeff Bezos. Dimon’s remarks on banking topics from the future of the branch to cryptocurrencies often make headlines. Major news outlets regularly ask for his take on the future of the economy and world politics.

Both Buffet and Bezos are friends of Dimon. The powerful trio is collaborating on an ambitious experiment to change the face of health care, called Haven.

What many people may not realize is that Dimon came very close to joining Jeff Bezos’ team, as President of Amazon, in the early days of the ecommerce giant’s evolution.

That’s a sobering thought given all the talk of a partnership with a major bank to offer Amazon Prime checking. Amazon partners with banks on payment products already, including the Amazon Prime Rewards Card, issued by Chase.

Ambitious Dimon’s Banking Journey Almost Detoured to Seattle

Early in his storied career, Harvard Business School-trained Dimon became protégé and right-hand man to legendary financier Sandy Weill. Dimon, a Greek-American, worked with Weill at American Express and then left to take over and build a firm called Commercial Credit. This firm, now a footnote to financial history, became the fulcrum that helped leverage the creation of Citigroup, the ground-breaking combination of Travelers Insurance and Citibank. Dimon had helped make that happen and he saw himself running Citi soon.

But the long association with Weill soured and the Citigroup CEO fired his heir apparent in 1998. At the time the official line was that Dimon had resigned. He jokes that the eldest of his three daughters’ first reaction was to ask for his cell phone, since he wouldn’t be needing it anymore.

In the aftermath of his termination, Dimon began getting offers and expressions of interest from other companies and one feeler came from a company called Amazon that Jeff Bezos had started as an online bookstore only four years beforehand.

“I got a call about Jeff,” Dimon recounts in a fireside chat before the Council on Foreign Relations (CFR). The career banker agreed to meet with the fledgling ecommerce builder, who had both engineering and financial background. The pair connected big time.

“I thought the world of him,” says Dimon. “We had a great lunch. I went to an [Amazon] town hall, which he never allows [outside] people into. We hit it off and we’ve been friends ever since.”

The possibility of Dimon working for Bezos, as his #2 — Amazon President — was floated. It was tempting on several levels.

For one, Amazon looked like it could really get legs, something that Dimon hadn’t felt about some of the internet companies that had been dangled in front of him as potential future employers. The Seattle lifestyle also had some appeal for an executive coming off a long push in high-pressure East Coast financial jobs.

Dimon, who always appears impeccably dressed in public, liked the idea of not having to wear a suit and tie. Ultimately, however, he concluded the Amazon job was “a bridge too far for my family and for me. I’d spent my whole life in financial services. And so I decided that I should probably find something in financial services.”

In 2000 Dimon became CEO at Bank One, investing his own money in the institution. in part because, “I look at business like I wear the damn jersey. I’m not a hired gun. I’m going to bleed for the company and give it everything I’ve got. I don’t like people who work at a company and talk about it like it’s a third party. It’s not a third party to me. It’s what I do.”

Jamie Dimon I am not a hired gun

In 2004 JPMorgan Chase acquired Bank One, and a bit over a year later, Dimon became CEO of the New York giant and later added the Chairman’s title.

Besides being one of the pinnacle jobs of world banking, being the head of Chase gives Dimon a “bully pulpit,” to use Teddy Roosevelt’s description of the American Presidency. In fact, Dimon’s name has been floated as a presidential candidate, and in 2016 he could have become President Trump’s Treasury Secretary, an offer he ultimately turned down.

Dimon is eminently quotable on a wide range of subjects. He speaks frequently at high-level conferences, gives interviews, writes, and testifies.

He often brings a degree of humor and humanity to what he says, sometimes poking fun at himself.

Like his name. When he was in elementary school, “Jamie” was a problem. (It’s his given name, not “James.”) “It’s a girl’s name,” he tells an interviewer. Early on he tried to get people to call him “Jimmy” but it didn’t take. Comparing his experience to the old Johnny Cash song “A Boy Named Sue,” Dimon says the name helped him learn to be tougher.

Read More: Millennials, Gen X and Even Boomers Will Ditch Banks for Amazon

Chase CEO Likes to Get a Rise Out of His Colleagues

The head of Chase has established a reputation as a master business leader, but he himself explains a difference between the legend and the man.

“Sometimes the press writes, ‘Jamie’s very decisive.’ But if you work for me, you know that on certain issues we torture the subject over, and over, and over until we think we have it exactly right.”
— Jamie Dimon, JPMorgan Chase

“Sometimes the press writes, ‘Jamie’s very decisive’,” he says in one interview. “But if you work for me, you know that on certain issues we torture the subject over, and over, and over until we think we have it exactly right. That could be a medical policy. … It could be whether we are going to enter a new country or we’re going to do a $20 billion bridge loan. I want to get some things exactly right. And we work the angles. The error rate drops when you get the right people in the room, share the information, get rid of the politics, give yourself the time, don’t rush to judgment.”

That approach doesn’t prevent the megabank from some stumbles, the “London Whale” rogue trader episode being a notable example.

Dimon says he reads a good deal, quickly during the week, and reserving his reflective reading for the weekends. “Then I read slowly, I take notes, I think about what I want to do about what I read and where I have to follow up.”

That’s also when he personally labors over the annual report letters, drafting sections, fixing on statistics he needs, or that he has but needs to put into context.

“I get help from a lot of people,” Dimon tells CFR. But he admits that sometimes he puts stuff in the draft “just to piss them off,” referring to Chase lawyers, accountants, and compliance people. “They’ll read an early draft where I’m just railing on about something. ‘Jamie, you can’t say that.’ ‘Yes, I can.’ And I know damn well that I’m going to take it out of the final draft.”

He has his bit of fun, but it’s no lark. The banker sweats over these letters. He says he spends five weekends on them to start with, and then devotes about ten more half-days to it.

“This forces me to work over things, so I can explain them in a way where everyone understands what I’m saying,” says Dimon. “It helps in policy development for the company for me to go through that exercise.” This applies to matters from affordable housing issues to artificial intelligence to cyber security, all of which Dimon has written about in his letters.

More and more, Dimon’s annual report letters dwell on public policy — not just platitudes or general criticisms, but breakout sections where he proposes multiple ways to solve the problems he’s surfaced in the overview segments of his letters.

“I have a deep frustration with what’s gone wrong in the United States over the last 20 years, for a wide variety of reasons,” says Dimon. “I like to study the issues, write down what I think, and give it a different kind of perspective.”

“What’s the most important thing for the world? A really healthy and strong United States. And I make the point in my annual letter that if we don’t fix some of these problems our economic, moral, and military dominance may cease to exist. … as we tear ourselves apart over things which we really should have fixed.” He worries about the student lending crisis — and bad ideas being raised to “solve” it; the difficulty to get anything done in any business field due to choking regulation; crumbling infrastructure that can take decades to repair or replace; and the nation’s inability to reach political consensus on almost anything.

Read More: Jamie Dimon’s 9-Point Plan for Making Banking Better

Dimon on Time Management, Meetings, Family

“I think people could manage their time better,” says the Chase CEO. “I think most are terrible at it. They’re tearing their hair out. They’re senior people. They’re busy. They don’t return their phone calls. I return every phone call, every email, every day. I am never rushed. I’m almost never late. I hate that. Your stomach churns.”

“Some executives have once-a-week sit-downs with every person who reports to them. I don’t do any of that stuff. It’s a waste of time.”
— Jamie Dimon, JPMorgan Chase

How does Dimon manage his day? About a third of his time, he says, is very rigorous. This gets reserved for scheduled discussions about Chase business issues, risk issues, situations around the world that need weighing.

Dimon says he also leaves time in his schedule for “ad hoc stuff.” In fact, he says about 40% of his schedule is unscheduled “white time” that he uses for walking around talking to staff but also for being available.

Busy bankers will wonder how he has so much white time. Dimon does so by avoiding filling his time with the sort of routine meetings others stuff their days with that he sees as unnecessary.

“Some executives have these once-a-week sit-downs with every person who reports to them, for an hour each. I don’t do any of that stuff. It’s a waste of time,” Dimon said at a CFR gathering. “If you work for me, you have a follow-up list. I know what’s on it. You know what’s on it. And you had better bring up everything important to me.”

Dimon says he lives a “binary life — family and business. Some of the funny stories he tells are about things his three daughters have said. To this day one still calls him “CEO-Man.” But he says he’s makes time for Sunday family dinners most weekends and spends frequent weekends with family at his country house.

“I don’t do East Hampton,” says Dimon, referring to the tony summer retreat on New York’s Long Island. “And I don’t do black tie. I just don’t have the time.” Over the years he’s had to travel about half of his work time, but when it comes to family life, “I try to be really rigorous about that stuff.”

And he says now that he has four granddaughters, “I still diaper. It’s just like riding a bike.”

Dimon on the Future of the Branch (It has One)

In June 2019 Chase opened a huge flagship branch in midtown Manhattan that roused the predictable jibes from the fintech community.

They have their beliefs and their theories, and meanwhile Dimon plays his own cards.

“People in business, you always look at facts,” Dimon told Andy Serwer of Yahoo Finance on opening day of the flagship. “Chase has a million people a day that visit branches. Millennials are doing it less, but they’re still doing it. We’ve got 50 million people on digital. We’ve got 21 million different customers a year going to a branch.”

He added: “The average customer visits branches, uses our call centers, and does digital. They do all of it.” Plus, younger consumers are not as different in his experience as some believe. “As they get more money, they act more and more like you do,” Dimon said to Serwer.

Jamie Dimon Chase branch new format

The Chase flagship branch features fresh concepts in teller stations (center) and casual meeting spaces (left in background) for consultations. Photo courtesy Allen International.

CNBC’s Jim Cramer asked Dimon why Chase had expanded into Philadelphia with branches, when Citibank spent $50 million in a similar effort and then closed the branches because the bank had found them “unprofitable.”

“I don’t know what their issues were,” he told Cramer. “But we are very careful. We opened 50 branches. Obviously they will lose money in the short run. But we hope — no, not hope, I am pretty sure, the only question is, how long — that in five or six years they’ll be making a million a year in profit.”

Dimon added this: “Remember, when we come to town, we have credit cards, mortgages, auto, retail lending. Those branches also serve local community organizations. They serve private bank clients. And our average branch, something like 25% of the business is the local small business owner who needs a branch down the street to drop off currency and coin, sign up for merchant processing, and more.”

Concerning the New York flagship branch, Dimon makes the point that it is one format.

“We love new formats,” Dimon states. “We try all different formats. And over time, those will change. The newer formats feature more ATMs, fewer tellers, more advisors, private client advisors, small business advisors, and mortgage advisors. So the advice part is going up, the operational part is going down.”

On average, Dimon points out, Chase branches are shrinking in size — just not the flagship.

See all of our latest coverage on bank branch transformation.

Dimon’s Take on What Happened to Finn

The context of a big new flagship branch coming right on the heels of Chase’s announcement that it was shutting down its digital banking brand Finn has drawn extensive comment.

Dimon defends the Finn shutdown.

“For the whole business world and the regulatory world to act like a mistake is always a bad thing is itself a mistake.”
— Jamie Dimon, JPMorgan Chase

“I don’t consider Finn as a failure at all,” he told Yahoo Finance. He characterized it as more of an experiment. “We took a great team of people, and we said that digital-only may be fundamentally different from a bank, so both they and the bank had to build out digital.” What Chase learned from Finn will be merged into its mainstream product for all consumers, he said.

The banker invoked the sayings of Amazon’s Bezos about so-called failure.

“We’re the kind of company where it’s OK to have a skunkworks, try out some app,” said Dimon. “If it doesn’t work [on its own], merge it in. You learn from it. I mean, Jeff Bezos always talks about how mistakes are how you learn. And, you know, for the whole business world and the regulatory world to act like a mistake is always a bad thing is itself a mistake.”

Read More: What Makes A Great Digital Banking Transformation Leader?

Dimon’s Views on Facebook’s Libra Cryptocurrency

Facebook’s proposal to create the Libra “stablecoin” and the Calibra digital wallet continues to generate questions, angst, anger and confusion. The cryptocurrency doesn’t even exist yet and people are already talking about loans made in Libra.

Dimon remains a bitcoin skeptic, but JPMorgan Chase has been developing its own blockchain structures and has been working on the JPM Coin, which will differ from “traditional” cryptocurrencies in that it will be backed by dollars.

Facebook, Dimon told Yahoo Finance, “wants to serve their clients. That’s fine. I also want to serve their clients. I always look at these systems as something we’d like to do ourselves. And we should — we don’t always want to be forced into someone else’s ecosystem.”

Asked if cryptocurrencies represent “an existential threat” to his bank’s core businesses, Dimon says talk like that indicates that people don’t think clearly. “We move $6 trillion a day around the world,” says Dimon. “It’s very cheap, very secure. The banking system has already built Zelle for real-time P2P payments, and TCH, the clearing house, has built real-time banking system payments.”

“We’re going to have competitors,” Dimon adds, “whether it’s a cryptocurrency competitor or another fintech competitor. I tell our people, you know that they’re out there. You know they’re coming. You know they want to eat your lunch. Assume it. And it might not be the ones we see. It might be the ones we don’t see.”

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