We are starting to get some accurate information now on just how disruptive cryptocurrency and all associated new technology is going to be for the banks. Of course the accurate information is NOT coming from the banks.
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"Ex-Barclays CEO: Banks are about to have an 'Uber moment' — and it's going to be painful"Antony Jenkins, the former CEO of Barclays, has a nightmare vision for the future of big banks.
In a speech in London this week he said: "The incumbents risk becoming merely capital-providing utilities that operate in a highly regulated, less profitable environment, a situation unlikely to be tolerated by shareholders."
Jenkins says a series of Uber-style disruptions in the industry could shrink headcount at traditional big banks by as much as 50%, while profitability in some areas could collapse by over 60% — huge predictions from a man who, until recently, ran one of Britain's biggest banks.He adds: "In my view only a few [incumbent banks] will have the courage and decisiveness to win in this new field."
The problem? Financial technology, better known as fintech.
Jenkins, who was ousted as Barclays CEO in July, says a new wave of tech-savvy startups that can do things better, faster, and cheaper than the big banks will disrupt their traditional businesses like lending, payments, and wealth management.
He isn't alone in thinking this. A survey by software firm Temenos released on Thursday found 27% of senior bankers named tech companies as the biggest threats to their businesses.
In fact, we're already seeing it happen with startups like Lending Club and Funding Circle (lending), Square (payments), Nutmeg (wealth management), and TransferWise (international payments) — all of whom Jenkins name checks in his speech at Chatham House.
Jenkins recently visited Silicon Valley to hobnob with fintech types out there and it's convinced him that financial services are about to be disrupted in the same way publishing, telecoms, and the music industry have been.
He says:
We will see massive pressure on incumbent banks, which will struggle to implement new technologies at the same pace as their new rivals. That will make it increasingly challenging for them to deliver the returns and profitability that their shareholders demand.Ultimately, those forces will compel large banks to significantly automate their business. I predict that 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 expect a decline of at least 20%.
A halving of headcount and branches over 10 years! That is a huge decline. The prediction coincides with reports that Lloyds is poised to axe 1,000 jobs as part of branch closures and increased automation.
Full article:
https://search.yahoo.com/search?fr=mcafee&type=C211US876D20151107&p=This+is+the+%E2%80%9CUber+moment%E2%80%9D+for+banks