JPMorgan Chase aims to spend $12 billion on tech this year

JPMorgan set out technology spending plans that will see it use microservices architecture, cloud and modern engineering practices to accelerate software development. JPMorgan is also planning to redesign the way it attracts and retains the best technology people.

The company will spend more than $12 billion on technology in 2022, contributing to an eight percent rise in expenses. The bank is also betting big on AI and machine learning to get more value out of its data and focusing on its commitment to cybersecurity.

The bank will split its $12 billion tech budget this year about evenly between the two types of technology investments, which it calls run the bank and change the bank. Run the bank technology spend has to do with maintaining the legacy infrastructure, keeping the lights on - “foundational and mandatory” spending. Change the bank spend is about investing in the future.

In addition to maintenance spending, the other half of JPMorgan’s investment spend is intended to drive innovation across its businesses and with client-facing products. The bank will continue to spend on regulatory-related investments, modernization and the retirement of technical debt. Jeremy Barnum, the bank’s CFO, cautioned analysts and investors not to look at this type of spending as merely “defensive”.

Barnum said, “I think that’s actually a great example of the whole point of this conversation, which is that retiring technical debt is an easy thing to not do if you’re applying defense focused on short-term targets. But if you’re playing offense for the long term, it’s exactly this type of decision that creates some of the frustration… that’s critical for the long-term success of the company.”

JPMorgan is also spending to compete with big tech’s aspirations in finance and banking. With 59 million digital Chase users, JPMorgan somehow continues to position itself as a scrappy underdog, competing against fintech and big tech.