LONDON’S BUSINESS NEWSPAPER
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FORMER BARCLAYS BOSS WARNS ESTABLISHED LENDERS CHRIS DORRELL A FORMER bank boss has warned London’s established banks they need to adapt faster to the rise of fintechs if they are to survive. Antony Jenkins, who led Barclays from 2012 to 2015, has told City A.M. that the oldest players in the industry face a “world of very slow decline” if they fail to adapt to new technologies. “This industry is really on the brink of having to undergo radical transformation if it’s going to remain relevant to its customers,” he added. Jenkins highlighted how the explosion of user-friendly fintech firms had transformed the banking landscape. He also predicted that the entry of big tech firms into the market, such as Antony Jenkins led Barclays from 2012 to 2015
Apple and Amazon, would put banks under pressure to adapt to remain competitive. According to research by fintech firm 10x, founded by Jenkins, 20 per cent of customers who left their bank did so because of poor customer experience. The research shared exclusively with City A.M. – which surveyed over 150 banks leaders and more than 150 managers in eight different markets – shows that bank leaders around the world are aware of the scale of the problem, with nearly two thirds of leaders suggesting they have further to go on embracing new forms of technology. The same proportion admitted that their slow rate of digital transformation has directly resulted in them missing out on new customers. As Jenkins argued, “these issues have moved from something that sat largely
inside the technology department to something that has become a strategic issue for banks.” But the research also suggested that banks would struggle to hold onto their staff if they failed to upgrade fast enough. Some 94 per cent of managers surveyed said they would leave their current position to work for a competitor bank with better tech. Although Jenkins did not think that banks were “the dinosaurs roaming the savannah that they are sometimes painted as”, he warned that without fundamentally changing they would face “slow decline”. He suggested that banks would either have to fundamentally redesign their in-house technologies from the ground up or operate on a ‘banking as a service’ (BaaS) model, where they are pushed down the value chain. “The danger is that if you don’t pick one of those two models – and then execute really well against it – you could be in a world of very slow decline,” he said.
JESSICA FRANK-KEYES FORMER Scottish National Party (SNP) leader Nicola Sturgeon was released without charge yesterday after she was arrested as part of an ongoing police investigation into the party’s finances. Sturgeon, 52, was arrested on Sunday afternoon and taken into custody “by arrangement” with Police Scotland, where she was questioned by detectives. In a statement, Sturgeon said the experience was “deeply distressing”. She wrote: “Obviously, given the nature of this process I cannot go into detail. “However, I do wish to say this, and to do so in the strongest possible
terms. Innocence is not just a presumption I am entitled to in law. I know beyond doubt that I am in fact innocent of any wrongdoing.” It comes after her husband Peter Murrell and then-SNP treasurer Colin Beattie were detained and questioned in April. Both were released without charge pending further inquiry. Sturgeon and Murrell’s home and the SNP headquarters in Edinburgh were also searched. The investigation, launched in 2021, began after allegations £600,000 raised for Scottish independence campaigning was used elsewhere. Murrell quit as SNP chief executive after Sturgeon resigned as leader In February, and the party agreed to review transparency and governance.
Fed ‘skip’ on rates now analysts’ favourite with inflation beginning to cool CITY A.M. REPORTER THE US Federal Reserve is set to pause its interest rate hiking campaign at its next meeting this week, analysts predict. Top officials from the central bank have signalled it will likely avoid hiking the world’s most important
interest rate, which now hovers between 5 per cent and 5.25 per cent, when it announces its next rate decision on Wednesday. In April, US inflation fell to 4.9 per cent, while core inflation, which removes more volatile food and energy costs, slowed to 5.5 per cent. May’s US inflation numbers, out
on Tuesday, are expected to drop again, with headline inflation falling to around 4.1 per cent and core price rises slowing to about 5.3 per cent. Most economists think the Fed will skip on another hike this week, but they predict the monetary authority will lift
its rate to at least 5.5 per cent this year. “Recent briefings from some Fed officials do suggest that a divergence of views is forming on Federal Reserve Chair Jay Powell
how to move next, with a slight bias towards skipping June and looking to July for the next rate hike,” Michael Hewson, chief market analyst at CMC Markets, said. Meanwhile, the European Central Bank looks set to hike rates by another 25 basis points to 3.5 per cent on Thursday this week.
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