According to Antony Jenkins, the former chief executive of Barclays, the banking sector will never return to the bumper profits that were observed before the global financial crisis,
At the Lendit Europe conference in London, Jenkins said that the fintech revolution would bring big benefits to consumers, with a large “societal pay-off.” However, big banks risk being left behind.
“It’s not so good for the banks because what we’ve probably seen in the period between the late ‘80s and the crash is the heydey of bank profitability and that will never return,” said Jenkins.
Jenkins established the 10X Technologies, a banking technology firm, in October 2016 to establish a unified, cloud-based platform for banks, the technology at the core of banking. After three years in the top job, Jenkins was forced out of Barclays in 2015.
Jenkins claimed that small fintech start-ups have an advantage over big banks in encouraging the adoption of artificial intelligence. Large banks with multiple legacy systems often have large amounts of data that is spread out in different places. However, combining that data can be very labour-intensive.
Jenkins said: “In almost every financial institutions that data is fragmented across many different technology stacks and it is incredibly difficult to run even machine learning on these databases.”
Jenkins claimed that the implementation of the new technologies would be pushed by smaller start-ups rather than the large incumbents such as Barclays.
Jenkins said that those technologies include “transformational” technologies that use distributed ledgers and artificial intelligence.