Former Barclays CEO Antony Jenkins has claimed that major players in the banking industry could be left behind in the adoption of new financial innovations like Blockchain technology. He claims that banks are generally good innovators, but are not as fast as outsiders in adopting innovations for commercial applications.
According to Jenkins, banks struggle when it comes to transforming their operations and it is the major technology companies and financial technology start-ups that are dominating in said area.
“I think what we see in all industries, especially in financial services, is that incumbents (banks) tend to be quite good at innovation – they throw a lot of resources at that – and then the transformation is much harder for them. If you look at all the interesting work on transformation, it’s really going outside the big incumbents. And the incumbents themselves are starting to realize this.”
State of new technology adoptions in banking and other industries
In its report released in late August 2017, the World Economic Forum claimed that banks were very far behind the major technology firms in the development of technologies such as cloud computing, artificial intelligence (AI), and big data analytics.
Meanwhile, technology company IBM has announced that it is allowing major food firms such as Nestle, Unilever, and WalMart to utilize its Blockchain network for the tracking of data on the origin, condition, and movement of food.
Potential benefits of Blockchain in banking
According to Jenkins, the use of Blockchain or distributed ledger technology in the banking sector could result in the issuance of mortgages and credit to customers in a matter of minutes.
“Over time, what you could see for example, is a mortgage being granted in 10 minutes, you could see a letter of credit being granted in two minutes, those types of things.”