BigTech, RegTech, crypto and digital demands are just a few of the challenges big banks face. Quartz’s John Detrixhe discussed all this and more with 10x Founder and Executive Chairman Antony Jenkins as part of a series of features on the Future of Finance.
During their conversation John and Antony touched on insights stemming from a Chatham House speech Antony delivered in late 2015: Approaching the 'Uber Moment' in financial services: How technology will radically disrupt the sector.
John: What is your take on the universal banking model? It seems like it’s being squeezed on multiple sides, from new digital banks to pure investment banks?
Antony: “There’s always a danger for big incumbents to assume that they’re so strong and dominant that people can’t come along and challenge that. I think what we’ve clearly seen in the last two to three years is those positions are now starting to be challenged. This is what I referred to as the Uber moment when I gave that speech, now almost four years ago. We are seeing successive Uber moments.
People ask the wrong question about the neobanks. The question about the neobanks is not, “Are they going to be profitable in the long run?” It’s, “Have they demonstrated that there’s a market for a different type of bank experience?” And clearly they have.
What that means for the incumbents is, at a minimum, they’ve got to compete with the functionality and user experience that the neobanks are providing. And that becomes very difficult and expensive to do on the existing technology stacks that the banks have.
On the other hand, I’m not the sort of person who thinks the bank industry is going to be obliterated tomorrow, because I do think the banks can change and get into the mode of transformation, there’s still an opportunity there. They have many, many strengths and they need to be able to leverage them. And the way to do that is to use these new cloud-native technologies
The one thing I really sense now is that increase in the rate of change, and that is going to flush out a lot of opportunities for people who want to seize these opportunities to create value through deploying the new technology."
The above excerpt is from the Quartz story: Barclays’ former CEO says banks should beware the story of Uber.