JP Morgan Chase Acquires Vastera

For casual observers, the JP Morgan Chase Vastera Acquisition announcement might seem odd. Why would a financial services firm acquire a trade management software and services company? I believe that JP Morgan Chase recognized that the physical movement of goods and cargo is as important as the movement and tracking of financial payment and settlement on a global basis. No longer satisfied offering just basic trade services such as letters of credit to customers, JP Morgan Chase will now be able to offer a range of supply chain management consulting services and software, specifically around vendor management and screening, audit and internal compliance reviews, shipment tracking assistance and assistance with ever-changing harmonized codes, import duties and tariffs among others. Indeed, the deal is further validation that Spend Management has become an integrated part of everyday trade and financial management for organizations of all sizes. JP Morgan Chase acquired Vastera in their words because of the need to offer: “a complete integrated cash, trade and logistics solution across the physical and financial supply chains in a way that maximizes benefits to our clients.” The deal makes perfect sense when one considers that the Big 4 accounting firms have for a long time offered a range of consulting services (along with audit, tax, and trade) but it brings up other tricky issues such as lender liability (e.g., should banks be in the business of making specific supply chain prescriptions for their clients?) AMR Research likes the idea -- You can find their take on it here. While I agree with AMR's perspective, perhaps we all need to spend some more time digesting the regulatory and ethical implications of banks getting into the trade and Spend Management consulting and software businesses. It's a valid question to ask whether JP Morgan Chase's own financial interests might get in the way when selling consulting and software to their clients. And it's my guess that the feds have not had their last say on the issue, either. -Jason Busch

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