Business World

Wednesday 7 December 2016

Banks face "Uber moment" that may decimate jobs - former Barclays boss

Published 26/11/2015 | 08:20

Antony Jenkins, former chief executive officer of Barclays
Antony Jenkins, former chief executive officer of Barclays

Banks across the world may cut up to half their jobs and branches in the next 10 years as they fight to stay relevant and profitable in the face of sweeping technological change, the former head of British bank Barclays said.

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"The number of branches and people employed in the financial services sector may decline by as much as 50pc over the next 10 years, and even in a less harsh scenario I predict they will decline by at least 20pc," Antony Jenkins, who was ousted as chief executive in July, said in a speech.

For Barclays, that would see between 26,000 and 66,000 jobs cut worldwide, and 280-700 branches shut in Britain.

Mr Jenkins had cut scores of branches and was midway through a plan to cut 19,000 staff when he was fired in July.

In his speech, titled "Approaching the Uber moment in financial services", he said technology was "an unstoppable force" that would improve customer service, risk management and efficiency and see new banks become household names.

The amount of capital being provided to new start-ups and financial technology firms meant the industry was not far from causing "real disruption", he said.

Traditional banks would struggle to implement technology at the same pace as new start-ups, and this would drag down returns, he said.

"The barriers to entry are quite high in financial services, so that will allow the incumbents to probably last longer than in many other industries.

"The risk is that incumbents will be pushed into this utility, capital-heavy role that we've seen in other industries like telecoms. Ultimately, that will become intolerable to shareholders, so we could see consolidation and mergers," he said, adding that this was likely to come later in the 10-year period.

He said banks also faced a challenge in keeping or attracting the best technology staff, who preferred to work in Silicon Valley or in other industries.

"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," Mr Jenkins said.

Reuters

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