The world's banks will be forced to axe up to half of their staff and close 50% of branches over the next ten years if they are to remain relevant in an era of rapid technology change the former chief executive of Barclays Bank has warned.
In a hard-hitting speech at Chatham House reported by Reuters, Anthony Jenkins described the coming upheavals as the banking industry's 'Uber moment' as new entrants armed with agile Web technology overtake legacy incumbents weighed down by high costs of branches and old technology.
Jenkins was ousted from Barclays in July in the midst of a masssive cost-cutting programme that would have led to 19,000 job losses at the UK bank.
“The number of branches and people employed in the financial services sector may decline by as much as 50% over the next 10 years, and even in a less harsh scenario I predict they will decline by at least 20%," he told his audience. “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."
This is not a new theme for Jenkins, but it is becoming more urgent. In March 2013 he said that Barclays could cut 40,000 of its 140,000 employees over the next few years, returning to the theme again in November 2013 when he forecast significant branch closures and huge job losses as automated processes abolished manual processes across the business.
A recent report from Bank of America predicted that robo-advisors using algorithm-based systems to provide financial advice to consumers will themselves consign 25 million jobs in the financial and legal sector to the scrap heap over the next two decades.
Jenkins' thought echo those of BBVA chief Francisco Gonzalez, who in February predicted that up to half of the world's banks would disappear through the cracks opened up by digital disruption of the industry.
Just this week BBVA paid £45 million for a 29.5% stake in Atom Bank, one of the new breed of digital-only challenger banks that is hoping to seize on seismic shifts in technology and customer expectations of how banks should function in the future.