Antony Jenkins: Techie-feely - it's the new Barclays way
The chief executive is changing the bank’s culture through a gentle style and technological innovation. James Ashton asks him if it will be enough to win back the trust of customers and investors
It didn’t take Antony Jenkins long to acquire a saintly reputation when he succeeded Bob Diamond as chief executive of Barclays two years ago.
In contrast to the aggressive New Yorker, the Shropshire-raised Mr Jenkins, 52, was considerate, collegiate and intent on leading a cultural overhaul of the lender, whose traders’ attempts to rig interest rates and the gold price had battered its reputation.
But in trying to win back trust, Mr Jenkins may find he is also known for another trait: his love of technology and how it will transform the banking world. Over tea on the 30th floor of Barclays’ Canary Wharf headquarters in London Docklands, he reels off statistics: customers are using Barclays’ mobile banking app 24 times a month, going online with it twice a month and visiting a branch less than twice a month; call centre volumes are down 8 per cent on a year ago; and smartphones and tablets have changed the game completely – Mr Jenkins said customers can now secure a personal loan in six taps on their phone.
“What this does is shift the base of competition towards those who can deploy technology,” he said. It sounds like a recipe for branch closures and it might yet be. On top of tackling trust, the bank has to work out how to operate more cheaply as regulators require it to pile more capital on to its balance sheet.
But it also puts the lender direct competition with new rivals such as PayPal and Amazon – technology giants that have set up their own transaction systems.
Not another threat to banking as we know it? “I think it becomes a harder battle if you don’t know what you are doing,” Mr Jenkins added. “I don’t feel disadvantaged against them because I think we are doing some of the most creative work in the world on this.”
Before Mr Diamond came along with the boundless ambition of turning it into an all-conquering global bank, Barclays had a reputation for firsts. It opened the first cashpoint in 1967 and became the first financial institution to have a website in 1995. When he returned to London from New York after being recruited from Citigroup to run Barclaycard in 2006, Mr Jenkins placed an early bet on contactless payment, rolling out the service “at a time when others were reluctant to do so, to kickstart the market”.
Now here comes its bPay mobile payment system, a silicon wristband on show at music festivals this summer. When they are rolled out next year, Mr Jenkins, who has two early versions (one in pink, one in black), hopes they can be used on the transport system in London, for contactless payments of under £20 and even to gain access to buildings.
“People only adopt technology if it makes their life easier,” he explained. “They don’t adopt it just because it is cool or better for the bank. You could effectively get out of bed, leave your house, spend your whole day at work and come home again without taking your wallet, just using a pay band.”
Will such innovation improve trust? He distinguishes between “macro” and “micro “trust: “Do I trust my branch, my credit card? There has always been a gap between those two things. If people don’t feel the micro trust then they tend to go somewhere else.”
He forecasts that it could take five to ten years to restore the reputation of the £39bn bank, but insists that progress is being made. Barclays’ five stated values (Respect, Integrity, Service, Excellence, Stewardship) are hard to miss, plastered across the atrium. But Mr Jenkins’ reboot had to undergo a rethink last month when he announced plans to shrink investment banking to no more than 30 per cent of the business from roughly half, laying off up to 19,000 staff and ditching Mr Diamond’s vision of creating a global player.
The balancing act also needs to divert greater returns to shareholders, some of whom are still angry that Barclays’ bankers get paid more than they receive. “The juxtaposition of the dividend and variable compensation is a sort of easy shorthand for describing what people are frustrated about,” Mr Jenkins said.
It doesn’t help that Brussels introduced a cap on bonuses that most lenders, including Barclays, have skirted round by handing extra “allowances” to staff. If Mr Jenkins’ plan works, investors should get more in time. “We know shareholders would like a bigger piece of the cake; we have a lot of things we have to do first.”
His turnaround should benefit from improving economic conditions. Mr Jenkins sat next to George Osborne at the Mansion House dinner last week to hear the Bank of England Governor Mark Carney advise that an interest rate rise “could happen sooner than markets currently expect”. With that in mind, is he worried about the housing market?
“I’ve been on record for probably one and a half years as expressing concern there was potential for a housing bubble in the UK. I also said the regulator was watching it very closely. The comments from the Chancellor and the Governor show that is the case.”
Caution could be his watchword, but he has taken risks in his career. He joined Barclays as a graduate recruit in its South Kensington branch in London in 1982, quitting for Citigroup in a move that later involved uprooting his family to work in New York. He is married to Amanda, who he met while studying philosophy, politics and economics at Oxford. They have a grown-up son and daughter.
Much of his private life is a closed book. There is blues, jazz or rock music to suit his mood; he takes spinning classes downstairs in Barclays’ gym and Pilates classes closer to home in west London; running is his favourite activity. “There are only two places in the world where nobody can get you: one is when you are out running, the other is when you are on an aeroplane. Both of those are good times to think.”
You wonder, when he is pounding the streets, if the question of whether Barclays is past the worst might pop into his head. Among other things, the Serious Fraud Office is still looking into the bank’s Qatari fundraising six years ago. “Issues of the past will be around for a number of years to come yet, and they will flare up from time to time and we will have to deal with them. The important thing is not to create new issues.”
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