Big banks have no advantage over financial technology start-ups when it comes to artificial intelligence, a former Barclays chief executive has said.
Antony Jenkins, who led the bank between 2012 and 2015, said that banks have a tendency to focus on mainframe data storage rather than seeking solutions on the cloud.
“I think the biggest myth of all… is that banks and other financial services providers are advantaged in this new world because the logic is that they have a lot of data and therefore they ought to be able to be better placed to run these algorithms,” he said Tuesday at the LendIt Europe fintech conference in London.
Data is fundamental to machine learning and artificial intelligence. The development of big data — huge datasets used to highlight patterns and trends — allows computers to predict future behavioral trends based on complex algorithms.
“The truth of the matter is that in almost every financial institution, data is fragmented across many different technology stacks, and it is incredibly difficult to run even machine learning on these databases,” Jenkins said.
He added: “Most banks will try to pull them into a central repository, it requires data cleansing. It’s very expensive, very slow, and actually frankly imperfect because the data is in the wrong place.”
Following Jenkins’ exit from Barclays, he founded a fintech firm called 10x Future Technologies, and is currently serving as its CEO.
The company raised £34 million ($44.9 million) in a funding round last month.
Jenkins said that his business’ technology platform has “a number of A.I. engines” built in. The start-up is developing digital banking solutions for a number of clients, including the challenger bank Virgin Money.
In aninterview with CNBC in August, he said this platform would be launched next year.
Heyday of banking ‘will never return’
Jenkins said he believed banks would never return to the “heyday of banking” that led up to the financial crisis.
“What we’ve probably seen in the period between the late ’80s and the crash is the heyday of banking profitability, and that will never return,” he said.
In June, the business leader said banks could end up becoming “as common as a Blockbuster video store.”
In 2015, he made the prediction that the number of retail bank branches and people employed in the financial services could decline by as much as 50 percent.