Ex-Barclays Antony Jenkins predicts demise of traditional banking

Ex-Barclays Antony Jenkins predicts demise of traditional banking

Former Barclays chief executive believes its the end of the banking world as we know it...and he feels fine.

Antony Jenkins, who founded fintech firm 10x Future Technologies in 2016, has written for Quartz that financial services is in the middle of its "Uber moment".

He refers to the closure of at least a third of bank branches in the UK in the last five years, and says "we should rejoice that the practices of banking models of the past, which have lost the trust of so many, are coming to an end".

It's an oft-repated cry from Jenkins, who has become a passionate advocate of the need for radical tech-driven change in traditional banking practices.

Citing challengers in the UK like Monzo and Starling and the visually appealing, fun-to-use tech platforms they offer, he sees banking moving to a "golden age" with a customer-first approach and streamlined services.

Just as Uber has negated the need for the intermediary of a taxi company or licensed body, technology such as distributed ledgers spreads the risk of a financial transaction and expedites the processes weighed down by centralised risk.

He uses as an example the idea of mortgages that can be approved in minutes thanks to AI and funded by a pension that uses blockchain to exchange the relevant data and create a smart contract.

Jenkins was group CEO of Barclays from 2012 until mid-2015, when he was sacked over a dispute with the bank's board about restructuring and cost cutting.

Comments: (5)

Tingting Xu
Tingting Xu - Topic News - Shenzhen 02 December, 2019, 10:021 like 1 like

No, i don't agree.  Before banking system exists, there was the private, personal banking.  Traditional bank will soon finds ways to fit in, but the blockchain has not guarentee any safety.

Melvin Haskins
Melvin Haskins - Haston International Limited - 02 December, 2019, 10:471 like 1 like

I would be interested in a breakdown of the amount of business carried out with banks by individuals compared to companies, shops and corporations. It seems to me that Mr. Jenkins is only talking about private individuals. In other words, a breakdown by both volume and value would help to understand what he is getting at. Businesses provide banks significant funding through fees and charges - far more than individuals - and are unlikely to be interested in Open Banking.

A Finextra member
A Finextra member 02 December, 2019, 13:311 like 1 like

" he sees banking moving to a "golden age" with a customer-first approach and streamlined services" Yes this move back to a stakehodler culture is what the capitalistic market requires.  This means companies, in this case bankd, focus on what their customers need.  If Branches are not necessary so be it.  If sexy user itnerfaces are required build them.  Blockchain while intriguing is all about removing the intermediary.  THis idea that "Uber has negated the need for the intermediary of a taxi company or licensed body" makes no sense.  Uber simply inserted themselves into the system as the new intermediary.

What is changing is not the nature of the function it is the actors who perform the functions.  We still need regulation, central banks and other mechanisms society inserted to protect the citizen.

Russell Bell
Russell Bell - Fastbase Ltd - Wellington 03 December, 2019, 02:51Be the first to give this comment the thumbs up 0 likes

Regards removing intermediaries, if you picture the present-day Uber model as an only partial realisation of a more far-reaching idea, then the template is applicable.

Imagine an open-source ride sharing app, not controlled by any company, where your payment goes to the driver via a market-model escrow service, providing arms-length mediation of disputes.  With the reputation score for drivers, passengers and mediators handled much as is done now, following a social-media model.

Thus no intermediary between passenger and driver, except for the escrow service.  The escrow and dispute resolution being an application-level function, specific to the ride-sharing app.  Using an underlying blockchain-based payment service that provides simple "irreversible" payments only, i.e. unlike the credit-card model.

The real Uber isn't like this of course, though nevertheless for the moment their price and service is pretty good, and will likely remain so while the company continues to focus on building market share, and while it remains nimble enough to stay a step ahead of local regulators.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 03 December, 2019, 10:091 like 1 like

"Uber has negated the need for the intermediary of a taxi company" is one of the most surreal statements I've come across in a long term.

Take advanced markets. Uber has merely replaced the taxi company as a different intermediary.

Then take emerging markets like India. There was no taxi company before. Riders paid cash to Drivers. End of story. Uber came in saying it's a taxi booking platform, sale / purchase is between Driver Partner and Rider. But government found a good source of tax in rideshare, which it never got in the old taxi regime. It made Uber charge and collect 18% Goods & Services Tax and remit it to the government. Uber became an intermediary in an industry that never had one earlier.