Fintech

JP Morgan to expand Hong Kong-based tech hires to support landmark China venture

PUBLISHED : Tuesday, 19 June, 2018, 11:03am
UPDATED : Tuesday, 19 June, 2018, 10:51pm

JP Morgan plans to spend a greater chunk of its technology budget in Asia and expand its Hong Kong-based tech workforce by 20 per cent as it gears up to launch its new Chinese securities venture.

The American investment bank wants the new recruits to include Chinese graduates in science, technology, engineering and mathematics (STEM) subjects, considered a key growth engine for China’s economic future, according to chief information officer Lori Beer.

To house the expanded tech workforce, the bank has already pre-leased about 225,000 square feet of office floor at The Quayside in Hong Kong’s Kowloon Bay, a building scheduled for completion in 2019.

“Our strategy of growing in China is so critical that I set a lot of steps with Mark [Leung, China CEO of JP Morgan] to grow that business,” said Beer in an interview with the South China Morning Post .

“China is a very important market to drive growth in JP Morgan.”

With an expanded global technology budget of US$10.8 billion for the year, Beer plans to invest in Hong Kong and China, and that includes building a stronger team.

She said the new office will focus on hiring “top-tier tech talents” from Hong Kong and China with skills in digital, AI, mobile, big data, and machine learning.

The new Quayside office, once completed, will centralise the majority of the company’s tech team.

According to the World Economic Forum, China is outgunning the west when it comes to students studying STEM subjects, considered the key to a sustainable knowledge-based economy. In 2016, China had 4.7 million recent STEM graduates, compared to 568,000 in the US. In 2013, 40 per cent of Chinese graduates finished a degree in that field.

“There is a great technology ecosystem and a great base of technology talent here,” said Beer.

“We’ve been really impressed with some young talents that we hired right from the university who quickly built their capabilities.”

Building a tech infrastructure platform is a key to the firm’s China strategy, she added.

In May, JP Morgan applied to the Chinese regulator to set up a new onshore securities business, in which it will have a 51 per cent stake. It marked the second attempt by the US bank to get a foothold in China, having pulled out of a similar onshore venture in 2016, in which it had held 33 per cent.

It follows a historic move by China to give global companies unprecedented access to its tightly controlled financial sector. Previously, western banks could only own up to 49 per cent of a Chinese securities joint venture.

“Obviously we have to get the regulatory approval first [for the majority stake in the venture],” Beer said.

“But hopefully as we get that and as we move forward, we can prepare for the underlying technology infrastructure that we need in China.

“What we need is to get the business up and running on the ground. To do that we need to go into China more deeply because it has a fantastic tech ecosystem. We can partner with local fintech firms to better understand that ecosystem and see what technologies are relevant to us going forward.”

As JP Morgan’s global head of information, Beer is interested in exploring ways to leverage the firm’s global tech investments to meet local regulatory or client needs, as well as to take what is built here and make it firm-wide solutions.

JP Morgan is currently partnering with Professor Pascale Fung and the Centre for Artificial Intelligence Research at Hong Kong University of Science and Technology.

“Together we are looking to solve problem in the financial domain which can be improved and solved by AI.”

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