In late 2015, Antony Jenkins said the banking industry was approaching its “Uber moment.” The former Barclays CEO predicted that major, established lenders could be forced to cut as much as half their workforces and bank branches in the coming decade. He said that a group of new banks would become well known brands.
Nearly four years later and his predictions seem broadly accurate. In the UK, the number of bank branches has dwindled to fewer than 8,000, compared with nearly 18,000 some 30 years ago. Digital banks—known as neobanks—like Monzo, Revolut, and Starling have become household names. The financial industry hasn’t hasn’t been gutted by layoffs—employment in the sector overall has been fairly stable—but there’s no question that soul-searching has intensified about the industry’s future.
Many executives have been on the lookout for Silicon Valley-style disruption to upend the dominant financial companies. But the backlash to Facebook’s foray into cryptocurrencies revealed that regulators are far more alert to tech’s advance into the business of money than they were to Uber’s march into the business of transport. Even so, established banks face multiple challengers, from fintech startups to specialized independent investment banks. These newcomers are not deterred by the deep regulatory moat that has protected big banks for so long.