JP Morgan CEO Says ‘There’s Nothing Mystical’ About Online Lending Startups

By Leena Rao for Fortune

Jamie Dimon weighs in on online lenders, regulation, and more.

JP Morgan CEO Jamie Dimon has been warning Wall Street that Silicon Valley is “coming” for some time now, but he made some telling comments on the state of the nascent financial technology industry Tuesday. In an interview with Bloomberg, Dimon in particular weighed in on the growing number of online lenders.

Online lending has been a hotbed for Silicon Valley venture dollars in the past few years, capturing 51% of all fin tech venture deals in 2014 and 50% in 2015.

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Dimon said of these companies, which include Lending Club, OnDeck, SoFi, and others, “Let’s look at lending, where they’re using big data for the credit side. And it’s just credit data enhanced, by the way, which we do, too. It’s nothing mystical. But they’re very good at reducing the pain points. They can underwrite it quicker using—I’m just going to call it big data, for lack of a better term: ‘Why does it take two weeks? Why can’t you do it in 15 minutes?’”

Dimon explained that JP Morgan could also make these decisions in a matter of minutes, and he’s been pushing this in the financial institution. JP Morgan also recentlypartnered with OnDeck to provide speedier small business loans.

He added that he doesn’t think regulation is holding traditional financial technology companies back when it comes to online lending. But it is harder for larger banks to charge high interest rates, which many online lenders do, so the space isn’t necessarily as profitable. Dimon’s comments come shortly after LendingClub wasforced to change its fee model and give an undisclosed amount of revenue to avoid being blocked from making loans by state regulations.

But Dimon also predicted that larger fin tech players will eventually become regulated, saying, “if they become big and significant, they’re going to be regulated, too, eventually. The government isn’t going to say, “We’re going to regulate banks, but we’ll leave these other companies alone.”

Although regulators may not be the grim reaper for these online lending upstarts, Dimon believes that a credit crunch will. “One of the issues with some of these lenders is going to be, where will their provider of credit be when there’s a crisis?” he questioned.

However, just because these startups may face challenges in the coming year, doesn’t mean he is discounting them.

“But, you know, honestly, who owns the future? Just because you have a good hand today doesn’t mean it’s good tomorrow.”

 The article first appeared in Fortune