JPMorgan Chase executives were asked a simple question during its third quarter earnings conference call: What's the benefit of spending the most on technology in the banking industry? The answer illustrates how every company is a tech company to stay relevant and customer engagement has to span multiple channels.

The banking giant is known as a big spender on technology. Some of this spending is to maintain infrastructure, but a lot of it is tied to automating processes, engaging customers and investing in artificial intelligence. For the AI strategy at JPMorgan Chase, see our recent customer storyView full PDF

Here are some of the reasons JPMorgan thinks it's wise to spend heavily on IT.

Customer engagement. CFO Jeremy Barnum answered the technology spending question with a digital customer lens. JPMorgan Chase has more than 53 million mobile consumer banking customers. Barnum noted that digital engagement is higher than the overall growth in customer accounts. Digital-only customers remain a small percentage of the overall customer base.

Barnum said:

"What are the benefits of being the biggest tech spender? I just think it's sort of mandatory right? I mean, we're a big and very technology-centric business, and the world is competitive. And everything is changing. Younger generations have different expectations, and we have to be nimble, and we have to be on our front foot. And otherwise, we risk getting severely disrupted."

Competition. JPMorgan Chase CEO Jamie Dimon said the bank has to invest in technology to stay relevant. He said Wells Fargo is an obvious competitor, but there are non-traditional rivals too like Apple, Stripe, Chime and Dave too. "There’s a lot of people coming up with these businesses in different ways. Some have been quite successful, like Stripe in payments. And so, we want to be very good and very competitive," said Dimon.

AI and the customer experience. Dimon was asked about JPMorgan Chase's AI investment and whether the bank could control the front-end customer experience. Dimon said AI is a tool that goes well beyond being the front-end of an app.

Dimon said:

"Banks have an extraordinary amount of proprietary data in addition to a large language model of public data. AI is an extraordinarily good tool to use. And there are multiple types of AI. So, we use AI for risk, fraud, marketing, prospecting. The management team is getting better and better at using data to do a better job of reducing errors, to serve clients better and to have a salesperson with co-pilots. We simply have to do it. Does it create opportunity for disruptors to come in? Yeah, of course. That’s always been true with technology, but we'll be quite good at it."

Spending going forward. Barnum said the company is still going through the budget process for the year ahead, but IT spending will likely be up. However, much of that technology spending is for futureproofing as well as increasing returns. "We're always very focused on cost. You can be rest assured of that. That discipline internally is as aggressive as ever as we go through the budget cycle. But there are long-term plays," said Barnum.