Dive Brief:

• JPMorgan Chase on Friday reported record net income of $12.1 billion for the fourth quarter of 2020, up 42% from last year's comparable quarter, as the bank saw gains from its investment arm and a release of $2.9 billion from its credit reserves. 

• JPMorgan Chase CEO Jamie Dimon said positive vaccine and stimulus developments contributed to the release of the bank's reserves, which it has been building significantly amid the coronavirus pandemic.

• "[O]ur credit reserves of over $30 billion continue to reflect significant near-term economic uncertainty and will allow us to withstand an economic environment far worse than the current base forecasts by most economists," he said in a statement.

Dive Insight:

The New York-based bank's corporate and investment banking arm continued its strong performance amid the pandemic and resulting economic slowdown, reporting a 82% rise in profit to $5.3 billion for the quarter. 

In its earnings presentation, JPMorgan Chase said it plans to add an extra $900 million to its $11 billion technology budget in 2021, with an emphasis on data analytics, cybersecurity and artificial intelligence. 

During a call with analysts, Dimon emphasized the importance of the bank's ongoing investments in cloud, cybersecurity and AI technologies. 

"When it comes to cyber, we have to do whatever it takes," Dimon said. "The cloud is real, the cost is real and the speed is real. ... Every single meeting we talk about what are we moving to the cloud, whether it's internal or external, where are we adding AI and machine learning?"

Dimon said the bank's use of AI — in asset management, corporate and institutional banking (CIB) trading and commercial prospecting — "is literally the tip of the iceberg."

"Whatever we say today, 10 years from now will be probably 50 times more than we're doing today," he said. "And I would spend anything to get it done faster."

The bank remains bullish on its branch expansion, and plans to have a presence in 48 states by midyear.

Dimon said the need for physical spaces for its commercial banking operation remains crucial, while at the same time acknowledging "the world needs less branches."

"We're not going in these states just to plant a flag — that would be a waste of time. We look at the major markets and the number of people that already know us through Chase, and we're optimistic that the strategy will pay off and will enhance business and our capabilities," he said. 

Dimon also commented on the growing number of fintechs vying for a piece of the competitive financial services space.

"We have to look inside about what we could do better or could have done better. I'm comfortable we'll be able to compete, but I think we now are facing a whole generation of newer, tougher, faster competitors," he said. "I expect to see very tough, brutal competition in the next 10 years. I expect to win, so help me God."