Antony Jenkins, former CEO of Barclays, appeared on BBC Newsnight this week to share his views on the current state of the banking sector and provide an interesting appraisal of the fintech industry and its threat to the status quo.
His short feature piece outlined the structural issues in the banking sector and why advances in technology could render these institutions redundant over the next 20 years.
Central to his argument was the potential for distributed ledger technology to reform the way in which transactions are handled and recorded by financial institutions, making the process faster, cheaper and more transparent for all.
The technology has been touted as transformative for a number of areas from capital markets trading to trade finance. But while Jenkins positioned distributed ledger technology as a direct threat to the banking sector – the reality is a little more nuanced – with a number of banks working to find new practical applications for the technology.
For example, R3, a fintech firm developing distributed ledger technology for financial markets, has already signed up over 70 banks to its consortium.
But Jenkins also covered peer-to-peer lending as an example of how banks are facing the increasing risk of disintermediation by fintech firms, which directly match borrowers with lenders to secure a better deal for both parties.
The model has become particularly prominent in the retail foreign exchange market, where providers such as Transferwise connect investors directly, thus avoiding bank fees and the risk of unfavourable exchange rates on smaller value transactions.
The feature was first broadcast on the 19th October and can be viewed on BBC iPlayer