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. Yet in 10 to 20 years’ time, he believes the need for banks to perform the function might no longer exist – already some investors are sidestepping banks by using websites to match borrowers and savers directly.…The Telegraph
Core of banking could be destroyed by blockchain, says Barclays’ former boss