(Reuters) – JPMorgan Chase & Co JPM.N has made a strategic investment in Icon Solutions, a UK-based company that advises and provides technology to banks to help them overhaul their digital payments systems, the companies said on Thursday.
Financial terms of the deal were not disclosed.
Icon will use the funding to grow the business and expand its geographic reach, Simon Wilson, co-head of global payments solutions at the company said in an interview.
The investment comes amid a global acceleration in digital payment volumes, in part due to COVID-19 lockdowns which have pushed more commerce and business flows online.
The fallout of the pandemic has also increased cost pressures on banks, making them more keen to digitize their services in a bid to save money.
At the same time, banks and established payment firms face increased competition from younger and more digital-savvy companies that aren’t burdened by legacy technology.
“The banks are having to find ways of cutting costs, but with the competition out there they can’t afford to just slash and burn,” Wilson said. “They are forced to look at innovative ways to do things. It’s simply not sustainable to remain on the cost base with the old technology they have.”
Icon’s clients include HSBC Holdings Plc HSBA.L, Wells Fargo & Co WFC.N and Citigroup Inc C.N, according to its website.
Sara Castelhano, Europe, Middle East and Africa head of payments, digital and solutions at JPMorgan wholesale payments, will join Icon’s board of advisors, the companies said.
Reporting by Anna Irrera; Editing by David Holmes