World’s banks may cut 50% of jobs and branches within 10 years – Barclays ex-boss

Banks across the world will be forced to axe up to half of their staff and close 50% of branches over the next ten years if they are to remain relevant and profitable in an era of rapid technology change the former chief executive of Barclays Bank has warned.

„The number of branches and people employed in the financial services sector may decline by as much as 50 percent over the next 10 years, and even in a less harsh scenario I predict they will decline by at least 20 percent,” Antony Jenkins, who was ousted as chief executive in July, said in a speech.

In his speech, titled „Approaching the Uber moment in financial services”, he said technology was „an unstoppable force” that would improve customer service, risk management and efficiency and see new banks become household names.

The amount of capital being provided to new start-ups and financial technology firms meant the industry was not far from causing „real disruption”, he said. Traditional banks would struggle to implement technology at the same pace as new start-ups, and this would drag down returns, he said.

„The barriers to entry are quite high in financial services, so that will allow the incumbents to probably last longer than in many other industries.

„The risk is that incumbents will be pushed into this utility, capital-heavy role that we’ve seen in other industries like telecoms. Ultimately, that will become intolerable to shareholders, so we could see consolidation and mergers,” he said, adding that this was likely to come later in the 10-year period.

He said banks also faced a challenge in keeping or attracting the best technology staff, who preferred to work in Silicon Valley or in other industries.

„If banks want to really compete for talent successfully, they are going to have to make themselves interesting places to work. It can’t just be about the money, because frankly the money isn’t going to be there the way it was before 2008,” Jenkins said.

Source: reuters.com