New technology such as artificial intelligence and blockchain will utterly shake up the fundamental principles of banking, challenging the entire industry according to former Barclays chief Antony Jenkins. He believes the innovation in finance could 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.
England technology will “utterly shake up” the entire banking industry, according to ex-Barclays boss Antony Jenkins. Speaking to the Institute of Chartered Accountants in Blockchain and Wales, Mr Jenkins said the banking industry would be facing “extraordinary changes” as blockchain allows investors to “match borrowers and savers”, rendering the need for maturity transformation obsolete. Mr Jenkins also spoke about the risk to branches and employees from the rise of online and mobile banking, as well as the dangers of “aging computer systems”.