According to former Barclays (NYSE:BCS) chief Antony Jenkins, certain technologies is about to disintermediate the entire banking industry. The Telegraph reports while speaking to an audience at the Institute of Chartered Accountants in England and Wales Jenkins says the rise of online banking, artificial technology and blockchains will threaten traditional financial incumbents.
Jenkins tells attendees at the Institute that innovation will break the current banking mold with investors and startups outperforming legacy financial management. Online banking will be so popular the former Barclays executive states that banks will have to close nearly half their branches to this technology. Jenkins predicts software and artificial intelligence will result in 20-50% of banking jobs cut in the future.
Antony Jenkins was an executive at Barclays from 2012-2015 and has spoken about this disruption of the banking sector before. Back in November of 2015 shortly after his leave from Barclays Jenkins made headlines saying relatively the same about the current state of banking. While talking to a similar audience in a discussion reported by Reuters, Jenkins explained the banking sector would soon face a lot of “Uber” moments due to financial technology.
“I’m predicting that over the next 10 years we will see a number of very significant disruptions in financial services, let’s call them Uber moments — If banks want to really compete for talent successfully, they are going to have to make themselves interesting places to work. It can’t just be about the money, because frankly the money isn’t going to be there the way it was before 2008,”
However, banks like Barclays are listening to what’s happening in the financial technology sector. The British multinational financial management company headquartered in London is very interested in fintech and blockchain technology. In fact, the bank has an accelerator program getting startups off the ground who provide Uber-like moments to the industry. Alongside this look into the future the banking provider, Barclays is working with the Bitcoin service based out of Dublin and Boston Circle Financial. Barclays (NYSE:BCS) will facilitate the storage of sterling for Circle consumers to enable UK bank account transfers. A senior official from the London-based bank said this past April, “We support the exploration of positive uses of blockchain that can benefit consumers and society.” A month before Jenkins speech, in 2015 Barclays Digital Officer in charge of the banks blockchain department, Derek White had positive remarks concerning the technology’s future as well. According to Business Insider that September White stated:
“It’s a new technology, we know a little bit about it but we wanted to learn more from the creators of it. They could see our genuine interest in the technology and they could see we weren’t looking to just sponsor, we were looking to shape. — We looked at how many experiments we wanted to do internally with the blockchain. The first wave led to 22 experiments, we’ve now got over 45 experiments our businesses want to do.”
With this said it’s hard to say if Jenkins predictions will become a reality as the banks are following this technology. But the cuts in jobs and physical branches prediction of them slowly dissipating seems to as the shift has been happening in great number since the financial crisis of 2008. Financial incumbents such as the British-based Barclays are steadily working with fintech and distributed ledger technology, and the thought of artificial technology and blockchain technology running the show doesn’t sound so crazy anymore.
Source: The Telegraph