Former chief of Barclays Antony Jenkins feels that new technologies like artificial intelligence and blockchain will change the way banking industry functions today. He says various innovations in the fintech sphere would eliminate the need for ‘maturity transformation’ – the process by which short-term deposits, such as current accounts and instant access savings, fund long-term loans including mortgages. That is a fundamental principle of the industry as banks can offer a low interest rate to savers while charging more to borrowers, profiting from the gap between the two rates. Jenkins cites the instances of some investors sidestepping banks by using platforms which facilitate a meeting between investors and borrowers. He also says banks are introducing artificial intelligence and robots – which could wipe out half of their workforce. Jenkins made these observations in an address at the Institute of Chartered Accountants in England and Wales. He also foresaw the virtual closure of branches of banks and the transformation from high street banking and onto mobile phones.
