Jeremy Wilson, Vice-Chairman of Corporate Banking, Barclays
Please give us a bit of background on yourself, and how your organisation plays a leadership role in the financial technology space.
I’m Vice Chairman of Corporate Banking at Barclays and also Chair of the Whitechapel Think Tank, the open public and private sector forum on blockchain and distributed ledger technologies, whose membership includes incumbents, disruptors, Governments and regulators.
I’m the independent Chair of the UK Government Engagement and Advisory Group which acts as a vehicle for Government to express its needs to the payments industry and for the industry to advise on and take them forward. This Group now includes consideration of these new technologies in the delivery of better government. I also chair the Data Sharing Principles Group; this is a public/private sector community working clear of vested interests on a simple code to cover the increasing ethical and civil liberty challenges of sharing data in a world of big data, artificial intelligence, data analytics and derived algorithms.
Finally, I’m Chair of the Banking Environment Initiative, a coalition of some of the world's largest banks, on behalf of the banking industry, looking to direct capital towards socially and environmentally sustainable economic activity. Its relevance here lies in the convergence of the fintech and green agendas.
Barclays itself is making a concerted effort to lead in the fintech space through initiatives such as our RISE programme, which is a network of physical spaces and a virtual community we’ve created to work with innovative startups to pioneer the future of fintech, and the Barclays Accelerator, which is a 13 week intensive startup programme designed to help businesses deliver breakthrough innovations in fintech supported by mentoring and access to Barclays data and APIs. We’ve found these programmes to be a great way to harness the potential of innovators in the fintech space and help them advance more quickly by making our experience and resources available.
More widely, we lead by taking an active role in industry wide work to progress the fintech agenda. Whether through white papers, participation in conferences such as this one, or other collaborative work, for example with R3, we’ve taken the approach that by sharing what we know and what we’re doing, and leveraging our reputation and credibility in this space, we can help the industry as a whole move forwards. Collaboration and open innovation is at the heart of what we’re doing to lead in financial technology development.
Another important aspect of how we approach innovation in technology has been to ensure that it’s not just one part of the bank focused on it. We’re looking at how fintech can improve the service we provide right across the bank, indeed it’s almost becoming part of the DNA of the organisation. Examples include our work with Smart Contract Templates through our investment bank and on trade finance documentation with our partners Wave through our corporate bank.
How well are financial companies adapting to the rapid pace of fintech development? What fields are furthest ahead of the game, and what sectors are being left behind?
It seems to me that the fields that are making the most progress are those that most clearly have challenges to address. For example, there is a lot of work happening in the trade finance area because the experts from that part of the industry recognise things in the supply chain that can be done more efficiently. Fields with less obvious improvements to make are probably not being affected by fintech as quickly.
Where the regulatory bar is higher, it’s also sometimes harder for fintech development to take hold. It’s natural that startups in particular will look to address the more accessible parts of the industry. However, this is where partnerships with larger financial institutions such as banks can be very effective, for example in capital markets where, without collaboration, it can be more difficult for small fintechs to implement their work.
What challenges do you see for fintech development and disruption, both from a user's perspective and from a regulatory standpoint?
There are challenges for regulators in ensuring that the consumer is protected, but at the same time not stifling innovation. That’s a difficult balance to achieve. PSD2 is a good example of this, with regulators and larger organisations having to make sure that the data that will be made available is used correctly and is properly protected. The General Data Protection Regulation is relevant to this area, too.
Funding is of course another key issue for fintech development. For small fintech companies, long-term funding is sought to allow them to progress through the various steps towards becoming profitable. It’s not easy as banks and other funding providers understandably find it difficult to offer this funding at an early stage. That’s why it’s crucial that large financial organisations continue to find innovative ways to support smaller fintechs, hence the Barclays initiatives mentioned earlier. It’s only through real collaboration that we will continue to drive the agenda forwards.
What will you be discussing at The Economist's Finance Disrupted Conference on January 25th 2017 in London?
I’m on the blockchain panel, and I’m looking forward to talking more about the potential of its technologies, the ethical and civil liberty issues around the sharing of data, a little about what we’re doing at Barclays, and where I think the industry can do more to promote adoption of the new technologies, not least blockchain, for the common good, especially in the emerging world of open data architectures. This is all so new that, in reality, there are few who can command everything; the value of a conference like this is in the intense sharing of rapidly evolving thinking.
What is the best approach to build successful blockchain technology?
You won’t be surprised to hear me say again that collaboration and openness is vital. More specifically, knowing where you can be open. If everyone is clearer about what they can make public, and the ethical principles behind that, we will all make progress more quickly.
Also essential to building successful blockchain technology is to start from a problem which needs to be solved, not a solution looking for a problem. This means listening carefully, and being adaptable to what is really needed to fix specific issues. This is especially true for partnerships between startups and larger organisations – the successful partnerships are those where the fintech has taken on its partner’s guidance and properly identified exactly what they are trying to achieve and the fintech partner has been able to take on the larger organisation's extensive stakeholder networks.
Who has most to gain (and who has most to lose?) from blockchain technology?
Essentially, those most open to change have the most to gain, and those not open to change are likely to lose out. However, it’s really too simple to think of the potential of blockchain in terms of winners and losers. It’s not a zero sum game and through collaboration and a lot of hard work, financial institutions, startups, corporates, regulators, individuals and wider society as a whole can all gain from the potential of this technology.
To learn more about the Finance Disrupted event, please click here.