From their new offices located high above Wall Street, LabMorgan employees have a clear view in all directions, with sightlines stretching uptown and to both Brooklyn and New Jersey. As the e-finance engine of J.P. Morgan Chase, LabMorgan also occupies an excellent vantage point for the identification of emerging trends in financial services technology.
LabMorgan, including the former Chase.com, now consists of approximately 250 employees. After the January merger, J.P. Morgan and Chase each brought complementary strengths to the combined entity. Chase.com had largely focused on technology assessment and consulting for projects on behalf of the bank and its strategic partners, while LabMorgan's strengths had been in its investment and portfolio development team. The combined LabMorgan extended its reach by adding business incubation services along with a stable of dedicated "E-Strategists" focusing on specific domains within financial services, ranging from consumer banking to M&A.
The result is a nimble organization that can spot trends from both technology and banking perspectives and then act accordingly.
Most of the companies in LabMorgan's investment portfolio have commercial relationships with J.P. Morgan Chase. For technology companies looking to gain traction in the financial services industry, landing such a prominent marquee client has its advantages. First, LabMorgan can help identify ways to use existing components from the bank's sizable technology portfolio. Next, the relationship with J.P. Morgan Chase helps to "credential" a new company's technology as a rising star.
Last but not least, there are the actual revenues from having a big bank client. "Having our balance sheet, our technology spend and our private equity pool all in one place is a dream for an entrepreneur," said Ameet Patel, chief technology officer of LabMorgan, formerly of Chase.com.
J.P. Morgan Partners, the bank's $24 billion private equity fund (including assets from the former Chase Capital Partners), participates in many of the investment opportunities unearthed by LabMorgan. "They have private equity specialists that can also look at the deals, and the expertise to look at it from another angle," said Patel. "It's very good from a validation standpoint."
But LabMorgan isn't counting on wild-eyed inventors coming up with appeals for funds in 30-second "elevator pitches." Instead, LabMorgan's technology team defines the fundamental requirements for applications likely to succeed. Then, they take a close look at the companies involved in the underlying infrastructure required by those applications.
By identifying companies that are actively pursuing new trends, LabMorgan can accelerate the growth of those firms with the most potential for transforming financial services. "If you can find a software company that is already there, you can work with them to come to the applications side," said Patel, who cites the example of wireless software infrastructure company Tantau, which was recently acquired by 724 Solutions in Toronto in order to bring together financial services applications with a quality infrastructure. "Successful companies are driven by great customers that keep pushing them," said Patel.
In some instances, companies in LabMorgan's portfolio can help the organization with its own business needs. LabMorgan's knowledge management initiative uses communication and collaboration technology from Brisbane, Calif.-based Intraspect, a company in its portfolio. The system, dubbed "Deep Thought," manages the flow of ideas within the company and the timely deployment of LabMorgan people onto the most appropriate projects based on their skill sets and competencies.
LabMorgan keeps on the lookout for new architectures in financial services. Whereas two years ago the hot topics were middleware solutions, customer relationship management and Internet technologies, technologies on the horizon now include wireless communications, XML, and the "real-time" Internet. "Right now, when we surf the Internet, we're basically passive browsers," said Patel. "There are new models of businesses that are going to set up a bi-directional conversation."
"Anyone can come up with a great idea," said Patel. "Then you have to execute. And that's what we're all about."
chief technology officer
Bank Profile: LabMorgan, the e-finance engine of J.P. Morgan Chase, identifies, invests in and helps commercialize technology initiatives that will transform the bank and the financial services industry.
HQ: New York, NY.