2019 CEO Survey: Robert Bedwell, JPMorgan

JP Morgan CEO Robert Bedwell. Picture: Supplied

Every year The Australian’s John Durie asks some of the biggest names in Australian business five key questions about what’s coming in the year ahead.

Here, in his own words, is what Robert Bedwell, the chief executive of JPMorgan Australia, sees ahead in 2020.

You can read more from the CEO Survey.

How is your company affected by low-interest rates and what is needed to boost the economy?

JP Morgan has a diverse portfolio of businesses in Australia and New Zealand. For our

transaction banking and custody businesses, the lower interest rate environment impacts

both our clients’ returns and our margins. While it is generally not positive for our markets

business due to a reduction in client flow, the impact of lower rates is less pronounced

across our investment banking business and may create opportunities.

A well thought out structural reform agenda to help boost the economy, would play an

important role in promoting business confidence and capex spend. Structural reform should

also help with lifting productivity growth, which is essential for ensuring a higher standard of

living for all Australians. In addition, a timely fiscal easing would assist with achieving growth rates that are consistent with a falling unemployment rate, rising wages growth and

eventually, target-consistent inflation.

What is the impact of government regulations on your company, including those

applying to the financial sector?

We believe that good regulation is important. In Australia, we see increased regulatory

change and significant additional expectations placed on our clients and our own

organisation. Some of this follows the banking royal commission, much of which has been

implemented in other markets already.

Good regulation is important to help support the efficient functioning of financial markets.

However, this needs to be well-coordinated and not put at risk either the attractiveness of

Australia as a place to do business or the continued growth of the financial services sector,

which is a strong contributor to Australia’s GDP. In addition to meeting what is expected of

us, we also attempt to help our clients navigate the changes and to play an advocacy role in

the industry.

What percentage of company revenues are spent on research and development, and

how is your company using technology to improve performance?

As a firm, we invest more than $US11.5bn annually in technology, of which our local

franchise is a beneficiary. We use technology to improve performance in a range of areas

across the firm. By example, we are using applied Artificial Intelligence and Machine

Learning for a number of initiatives, including anomaly detection, intelligent pricing, news

analytics, quantitative client intelligence, smart documents to reduce manual operations and

improve workflow, and with virtual assistants to improve client service and operational

delivery.

What are the three major policy issues facing the country and what should be done

about them?

The economic backdrop has become more challenging. The consequences of poor policy

decisions can be long-lasting and can have the potential to create economic challenges for

Australia’s future. Decision-makers need to work together to focus on energy policy, tax policy and industrial relations so that the business community has a clearer understanding

and can make informed investment decisions. Moreover, a greater focus on helping young

people, particularly those from underserved communities enter the workforce and

subsequently benefit from being part of the economy is of critical importance. Creating jobs

for young people and promoting on-the-job learning combined with vocational training is a

particular focus for JP Morgan and an area where we would like to see continued policy

attention.

What are the major impediments to long-term growth facing your company and what

can or is being done about them?

Managing a challenging economic backdrop, industry disruption, the threat of

de-globalisation and over-regulation are all potential impediments to growth. Ensuring

Australia remains relevant and an attractive place to invest capital, with legal and regulatory

certainty, as well as creating opportunities for the significant pool of domestic capital to be

invested internationally are all important. There is much that can be done to improve the

ability of domestic and foreign business to operate successfully, without impacting the high

standards that are already in place.