Voicemail service faces the axe in JP Morgan's cost-cutting drive

SINGAPORE - JPMorgan Chase, the largest US bank by assets, will no longer pay for voicemail services of employees who do not directly deal with clients.

The cost-cutting measure will save the bank approximately US$8.2 million (S$11.13 million) annually, the Financial Times reported last week, small change for a bank that posted US$22 billion in profits last year.

FT Columnist Gary Silverman wrote that such measures may mean a lot for regulated banks as "returns on equity in the sector are unlikely to reach the surreal heights of recent decades", but the bank is taking a risk by effectively pushing its internal discourse online, where it can be perused by regulators and prosecutors.

Major banks have been scrambling to cut costs in recent times to counter increased regulatory and legal expenses like the recent banking scandals that led to payments to the government, while revenue growth has been hurt by low interest rates.

JPMorgan has tightened its belt - trimming corporate banking, commercial banking and asset management department - as is the banking sector which plans to move towards a more automated way of doing business through Internet and mobile banking.

Voicemail costs for JPMorgan are about US$10 a month per line, and may be aimed at the employees who "provide the computer support for its wheelers and dealers on Wall Street", FT said.

The reductions are part of monetary cuts promised by JPMorgan chairman and chief executive Mr Jamie Dimon, but would be a tough sell for Mr Dimon who himself was awarded a US$27.7 million pay package by the bank last year.

"Efficiency is the new watchword on Wall Street, and the old masters of the universe are starting to sound like parsimonious shopkeepers," the FT article says.

The article generated a range of comments from readers who were scathing in their attack of Mr Dimon's pay package (which they calculated to be approximately US$10,000 per hour), but were also not in favour of paid voicemail services.

One reader called it a 20th century service - like fax, while another called it time-consuming and unappealing to the younger generation.

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