Technology is going to fundamentally transform the banking industry over the coming years, a former Barclays CEO told CNBC on Monday.
Antony Jenkins, who led the British bank through a tumultuous period between 2012 and 2015, said regulatory measures imposed in the aftermath of the 2008 financial crisis had made the global financial system safer.
But, ultimately, technology has the potential to make finance better for the customer, society and even banks themselves, he added.
“If you look at how the banks are capitalized today, the amount of liquidity they have inside them, they are way stronger today than they were before the crisis and that, of course, is a good thing,” Jenkins said.
“Some would argue there is still some way to go in that regard but actually the most profound force bearing down on the industry now is technology.”
Since the crisis, banks globally have paid a heavy financial price, while the industry’s reputation has plummeted. Lenders have paid out more than $320 billion in fines over the last decade, Reuters reported, as regulators probed them for mis-selling securities and rigging interest rate and foreign exchange benchmarks.
Next week will mark the tenth anniversary of the collapse of the investment bank Lehman Brothers, as a bubble in the U.S. sub-prime mortgage market burst.
All banks do is ‘just data’
“Financial businesses are data-based businesses, they are just data… and, of course, with technology now you can automate that and when you automate it, you can get a lot of efficiency and effectiveness,” Jenkins said.
He added that anything that makes handling data more effective can create a transformation and singled out developments in artificial intelligence (AI) and distributed ledger technologies as pivotal in driving this change.
Jenkins also referenced the impact of technological advancements in the insurance industry.
Earlier Monday, Lloyd’s of London announced the launch of a global search for technology talent. The so-called “Lloyd’s Lab” is designed to help the insurance giant become even more competitive by securing partnerships with innovative global tech start-ups.
“This is all about taking us into a technology driven future,” Inga Beale, CEO of Lloyd’s of London, told CNBC’s “Squawk Box Europe” on Monday. “There is huge demand from the market saying, ‘Come on, let’s get talking about innovation.'”
Lloyd’s has been slow to embrace digital technology that would cut down its costs over recent years.
Beale, who has been leading the giant insurer since 2014, will step down next year as part of plans to leave the insurance business. She is the first woman ever to be appointed as CEO of the historic marketplace.