Barclay’s ex-boss Anthony Jenkins recently said that technology could replace more than 50% of banking jobs. Finance Monthly heard from Ian Bradbury, CTO Financial Services, Fujitsu UK & Ireland, who shared his thoughts.

With the number of banking branches declining, the financial services sector is undeniably undergoing significant change, driven in no small part by the increasing adoption and implementation of emerging technologies. This of course has led to concerns of job displacement, and when we asked both the public and businesses which jobs most likely won’t exist in their current form 10 years from now, bank tellers was the top answer. One of the technologies said to disrupt the sector increasingly is Artificial Intelligence (AI), and in fact we found that seven-in-10 financial sector leaders believe technology such as AI will enable them to overcome many of the socioeconomic issues they are facing today.

The use of AI in financial services is nothing new. Trading businesses have used algorithms for many years, but what is new is the widening range of applications to which AI is being used for. The technology will not only replace existing manual processes, it will create new ways of doing things, which will add new value for businesses and their customers. For example, given the drive towards efficiency and agility, we can expect a lot of jobs to be created in the areas of automation, with more people employed to develop and implement AI-based automation solutions. It’s important to remember however that whilst some roles will disappear, many will surface in their place - 80% of jobs that will exist in the next decade haven’t even been invented yet.

It is the responsibility of us as a nation, from banks, government, to the companies creating these new technologies to ensure that we are equipping people with the right skills to manage this digital transformation that both the banking sector, as well as many others are currently and will be going through for the foreseeable future.

HSBC has today confirmed that it will no longer provide project finance for new tar sands projects including the construction of any tar sands pipelines. This policy would exclude HSBC from providing project financing for the Keystone XL and Line 3 Expansion pipelines. HSBC also stated that its overall exposure to tar sands will reduce over time.

HSBC’s move, disclosed in its new Energy Policy, is the most recent in a series of decisions by international financiers to distance themselves from the controversial pipelines in North America. French banks BNP Paribas and Natixis, and insurance and investment giant Axa, as well as Dutch bank ING, and Sweden’s largest pension fund, AP7, all made similar announcements in 2017. [1]

Greenpeace is now calling on Barclays, the only other major UK-based bank providing loans for tar sands pipelines, to rule out financing new tar sands pipelines in North America.

Oil from tar sands is one of the most carbon-intensive fuels on the planet because of the large amount of energy needed to extract it. The proposed pipelines are key to the expansion of the tar sands fields in Alberta, Canada. Estimates show Keystone XL alone could potentially add nearly a million barrels of oil per day to current capacity, as well as an estimated 175 million additional tonnes of CO2 per year. [2]

Commenting on the announcement, John Sauven, Executive Director of Greenpeace UK said: "This latest vote of no-confidence from a major financial institution shows that tar sands are becoming an increasingly toxic business proposition. It makes no sense to expand production of one of the most polluting fossil fuels if we are serious about dealing with climate change in a post-Paris world. HSBC has got the message. Now Barclays need to decide if it wants to be the only UK bank offering project finance to tar sands pipelines.”

Annie Leonard, Executive Director of Greenpeace US, said: “The world has changed dramatically since these controversial tar sands projects were first proposed. In the US, we’ve seen record floods, hurricanes and wildfires super-charged by climate change. We’ve also seen a powerful, diverse, and growing movement step up to stop new fossil fuel infrastructure like the Keystone XL pipeline. This move by HSBC is the most recent indication that the financial community has begun to see the increasing risk in funding pipelines. We now expect banks like the US giant JPMorgan Chase and Barclays, who have backed tar sands pipelines in the past, to cease their funding of these dirty projects.”

HSBC has previously participated in revolving credit facilities for TransCanada (the company building KXL) and Enbridge the company building the Line 3 expansion.

HSBC has also ruled out funding new coal fired power stations all around the world with the exception of three countries - Bangladesh, Indonesia and Vietnam where funding may continue until 2023.

Hindun Mulaika of Greenpeace South East Asia said: "By ruling out new coal funding by the end of 2019 in many countries, HSBC has taken a step in the right direction. However, by singling out Indonesia, Vietnam and Bangladesh as exceptions to their coal policy, they are creating a loophole in the countries that are most aggressive in their coal power planning and condemning their citizens to a lifetime of air pollution impacts. HSBC must close this loophole as soon as possible and turn their financial support to accelerating a transition to clean energy.”

1. BNP Paribas In October 2017 announced a decision to no longer finance “pipelines that primarily carry oil and gas from shale and/or oil from tar sands,” and will sever “business relations with companies that derive the majority of their revenue from these activities.” Dutch bank ING confirmed in June that its oil sands policy excludes financing tar sands pipelines. Sweden’s largest pension fund, AP7, announced that it will divest from TransCanada on the grounds that its proposed pipelines in Canada and the US were incompatible with the Paris Agreement. In December 2017 Natixis pledged to no longer fund “exploration and production projects concerning oil extracted from tar sands; infrastructure projects (pipelines, terminals and others) primarily devoted to transporting or exporting oil extracted from tar sands or companies whose business primarily relies on exploiting oil extracted from tar sands”, and insurance and investment giant Axa announced the “divestment of over Euro 700 million from the main oil sands producers and associated pipelines, and the discontinuation of further investments in these businesses” and no longer providing insurance to tar sands or associated pipeline businesses.

2. Greenpeace has published a report for banks and their shareholders outlining the financial and reputation risks that banks could face in arranging and providing finance for companies intending to build tar sands pipelines. See Figure 1 on page 3 for estimated additional greenhouse gas emissions per year resulting from proposed tar sands pipelines.

3. On Wednesday, the controversy over Justin Trudeau’s support for tar sands pipelines followed him to the Commonwealth Heads of Government meeting in London, where the Canadian High Commission was rebranded ‘Crudeau Oil HQ’ and blockaded with a 30m pipeline. Since March, weeks of ongoing peaceful direct actions in British Columbia against the Trans Mountain Expansion tar sands pipeline have resulted in the arrests of about 200 people.

(Source: Greenpeace)

This weekend, Barclays and Cabinet Office-backed security initiative Cyber Security Challenge UK, hosted an immersive competition to test the skills of thirty cyber enthusiasts. The competition required contestants to adopt the role of interns at a fictitious cyber security firm, who had to defend their company from a cyber-attack, triggered by an insider, all while their superiors were on a team-building canoeing adventure.

The competition is the last of 2017’s Cyber Security Challenge UK face-to-face competitions to unearth the UK’s hidden cyber talent and place these individuals in public and private sector cyber security roles to fill the critical cyber security skills gap. Not only does cyber security offer an exciting and varied career, but a lucrative one too – with roles averaging over £60,000 per year after training.

The competition took place in national heritage site and grand country house, Radbroke Hall, which is also the current site of Barclays’ Technology Centre. In the scenario, the ‘interns’, who were staffing a fictitious security firm called ‘Research4U’, had to spring into action after a hacking group launched a large-scale cyber-attack on the company, stealing confidential technology, source code and client data. The story saw hackers demand a ransom of £10m to prevent releasing the data to the press.

Competitors had to infiltrate and stop the fictional hacker group in order to destroy the leaked information before it could be released to the ‘press’. Leading cyber specialists from Barclays and other leading industry organisations assessed the contestants on their vulnerability assessment, reconnaissance, attack strategies and espionage skills in order to rank their performance and suitability for careers in the industry.

The winning team was team Wormhole: Carolyn Yates, Isabel Whistlecroft, Kajusz Dykiel, Peter Campbell and Waldo Woch.

The eightcontestants that have qualified for next month’s Masterclass grand finale were: Cameron Howes, Asher Caswell, Tom Brook, Vlad Ellis, Mohammed Rahman, David Young, Rajiv Shah and Isabel Whistlecroft. They will join the previous F2F winners from earlier in the year at Masterclass where they will compete against each other and have the opportunity to network with industry experts, in addition to winning career-enhancing prizes including degree scholarships, training courses, technology and gadgets and industry memberships.

The competition mirrors recent high profile attacks, such as WannaCry, where hackers held organisations to ransom across the globe. With the Public Accounts Committee revealing earlier this year that the Government’s ability to protect Britain from high-level cyber-attacks is undermined by a skills shortage, the need to find individuals with cyber skills has never been greater.

Troels Oerting, Barclays Group Chief Security Officer (CSO) and Group Chief Information Security Officer (CISO) said: “The best way to learn about cyber security is to engage in realistic scenarios, such as the competition that we’ve just hosted. Saturday’s event created a scenario that really tested a candidate’s ability to perform under pressure, think strategically, work as a team and display leadership skills. A career in cyber security requires various skills, including the ability to second-guess hackers and make critical decisions quickly. It was very encouraging to see students so immersed in solving the challenge we set them, and I wish all the candidates the very best in their careers.”

Nigel Harrison, acting Chief Executive of Cyber Security Challenge UK said: “This year’s scenarios have been varied in nature in order to demonstrate the range of cyber threats that this nation faces as well as the sheer breadth of sectors that need cyber security professionals – from banking and finance, to automotive and even retail. Sponsors, like Barclays make this possible and, in turn, help to open the door to dozens more careers. I would like to encourage any budding cyber security specialist, or ‘white hat hackers’, to consider applying for our competitions. The nation faces a growing cyber security threat, so we are in real need of talent that can keep organisations, and the public, secure. Why not Challenge Yourself today?”

(Source: Cyber Security Challenge UK)

Ashok Vaswani, the CEO of Barclays UK talks to Katina Hristova about championing digital skills for all and his outlook for the future.

Barclays has a history of innovation and continues to be a leader when it comes to technological innovation in banking services – tell us more about it.

 Barclays has been at the centre of British finance for over 327 years, and in that time, the world has changed beyond recognition. However, the reason we have been able to consistently deliver game-changing innovations throughout all this disruption has been a relentless focus on our customers, their needs and aspirations, and being there for the moments that really matter.

We have 24 million customers in the UK; roughly one in two adults. For me, success isn’t about driving the business to get 25 million customers – it’s about becoming indispensable for the 24 million customers we already have, by continuously making their lives easier, offering greater convenience and delivering value for them.

If we can’t do that, we won’t be around for another 327 years, or even 10 years. In this era of disruption, businesses will become obsolete unless they serve a clear purpose. Our purpose is to help people go forward.

What have been Barclays’ biggest achievements in the past 12 months?

We have been at the forefront of reinventing banking through a focus on great technological innovation with a purpose. I think our biggest achievements have been transforming the business and its culture as well as creating Barclays UK; a business that is truly fit to meet customers' needs and expectations in the digital age.

As part of that, we have rolled out a number of technology solutions to make our customers’ lives much easier, such as instant cheque imaging and video banking. Barclays was also the first bank to introduce contactless cash; a completely new way for customers to withdraw their cash using their Android smartphone or their debit card’s contactless technology.

We have also launched automated valuations for home purchases, shaving days off the processing time. Mortgage Agreement in Principle has also been introduced into 338 branches, allowing customers to obtain a mortgage decision in less than 15 minutes.

New digital processes have also helped improve the on-boarding of Business customers, and the introduction of pre-approved credit limits for Business customers has reduced the time required for customers to request an unsecured loan of less than £25,000 from five days to a matter of minutes.

In addition, we have opened 12 Eagle Labs, sites where people can use new technologies such as 3D printers and laser-cutters and which help facilitate small business growth in local communities.

We have also demonstrated a strong commitment to using technology to enhance customer security; Barclays was the first bank to pioneer finger-vein technology in the UK, and we are working to tackle fraud through innovations like voice biometrics, which over 750,000 customers have now registered for.

How would you evaluate the impact that you’ve had on Barclays achieving all of this?

In creating Barclays UK, I have set out three mains goals for the business:

• Continually demonstrating how we are putting customers first by providing value and making their lives easier.
• Demonstrating our commitment to supporting the UK economy.
• Fundamentally rebuilding trust in Barclays and reinstate pride in our profession by putting customers at the heart of everything we do.

Barclays UK has already made significant progress in achieving these strategic aims, and we have done this by putting the customer at the heart of everything we do.

Our investment in technology sets us apart, putting us at the forefront of innovation in the banking sector, delivering products and services that improve people’s experience, enhance accessibility and offer quicker and more convenient choices for customers.

At the same time, we have been working to make sure that no one is left behind in the digital revolution.

Our Digital Eagles have so far helped to support over 100,000 customers to become more digitally confident through dedicated Tea and Teach Sessions in our local branches, as well as delivering Code Playground sessions to teach young people basic coding skills.

We’ve also introduced the Digital Driving License, a free app through which users can earn a City & Guilds digital skills qualification, boosting their digital skills and confidence.

In 2017, Barclays UK launched its latest campaign to promote digital safety, a major nationwide initiative to raise awareness of cybercrime and help people protect themselves from fraud and scams.  Since the campaign launched in May, it has already helped 2.5m people take action to become more digitally safe.

We have also pioneered Beacon Technology, improving the level of in-branch service offered to customers with disabilities, as well as SignVideo, which allows deaf people who use British Sign Language instant access to an interpreter via the in-branch colleague iPads. Talking ATMs, supersize card readers and high-visibility debit cards have also been launched for the visually impaired.

In addition to championing accessibility, we want to ensure we are doing the right thing by society as a whole. As part of our commitment to helping people move forward in their lives, we run a number of skills and employability programmes, for example, the Barclays apprenticeship scheme, through which over 3,000 apprentices have already been offered employment. I also support the Armed Forces Transition, Employment and Resettlement (AFTER) programme, which provides work placements, employment opportunities, CV and interview coaching, and money management sessions, as well as funding for education and vocational courses for service leavers.

We also have the LifeSkills Programme, which provides schools with a range of free, curriculum-linked lesson plans, workshops and resources designed to help 11-19 years olds to develop the skills employers most seek. To date, over 4.3m young people have been reached through the LifeSkills programme via either in-school lessons or directly online.

I believe we are beginning to rebuild the trust and reputation of the banking industry, but I know we still have some way to go. However, by remaining committed to the strategy of putting customers and clients first, serving our economy and earning trust, I want to build a solid foundation on which we can grow. Barclays is creating a bank that is truly good for customers and clients, good for businesses and good for Britain.

As CEO of Barclays UK, how do you ensure you are directing the company in the correct direction? How do you advise your team to make the correct decisions for the company alongside your customers?

The thing I ask myself every time I make a decision is: “are we doing the right thing for the customer?”. I learned a lot from my Mum growing up, and one of the principles that has always stuck with me is that there is no substitute for integrity. Integrity isn’t just about what you write down as your mission statement, it’s also about how people behave when no-one is looking.

When it comes to my team, another thing that my Mum taught me is the importance of humility, that is to be ready to admit I don’t have all the answers, which is why I need many brilliant minds working to deliver our game-changing innovations.

I sincerely believe everyone needs to keep learning throughout their career. We can no longer rely on what we learnt at school to last a lifetime. I encourage everyone at Barclays to keep learning, particularly digital skills, and to develop an entrepreneurial mind-set.

What was your main motivation behind being the CEO of Barclays UK and what is the most rewarding aspect of your role?

The most rewarding thing about the role is the opportunity to work for millions of people.

In terms of how I got here, as a kid in Mumbai, my Mum wanted me to be a Doctor. When I said I didn’t want to do that, she actually took me to see my local bank manager to ask what he thought a good job would be.

I’ve since come to realise that the role of a bank manager is really at the centre of a community, and I have him to thank for the fact I became a Chartered Accountant. After that, I moved to Dubai aged 27 with $10 in my pocket, and met my wife there. That was the start of a fascinating journey working around the world.

What are your plans for the company for the rest of 2017 and beyond?

There are some exciting times ahead, with next year’s PSD2 and data protection regulation set to transform the shape of the digital economy. Barclays has all of the right ingredients to remain a leader in financial services, but we must be prepared and remain agile in order to take full advantage of the coming changes.

In the longer term, customer expectations are no longer confined to one industry – we are being judged not against other banks, but against the best in class from across our customers’ favourite brands. Is Barclays a bank, an information business or a technology company? We’re all three. But we will never lose that central focus on the customer, and that’s how we will thrive in a truly connected world.

The Financial Conduct Authority (FCA) has imposed a financial penalty of £284,432,000 (€400 million) on Barclays Bank Plc (Barclays) for failing to control business practices in its foreign exchange (FX) business in London. This is the largest financial penalty ever imposed by the FCA, or its predecessor the Financial Services Authority (FSA).

Barclays’ failure to adequately control its FX business is particularly serious in light of its potential impact on the systemically important spot FX market. The failings occurred throughout Barclays’ London voice trading FX business, extending beyond G10 spot FX trading into EM spot FX trading, options and sales, undermining confidence in the UK financial system and putting its integrity at risk.

Georgina Philippou, the FCA’s acting director of enforcement and market oversight said: “This is another example of a firm allowing unacceptable practices to flourish on the trading floor. Instead of addressing the obvious risks associated with its business Barclays allowed a culture to develop which put the firm’s interests ahead of those of its clients and which undermined the reputation and integrity of the UK financial system.  Firms should scrutinise their own systems and cultures to ensure that they make good on their promises to deliver change.”

Between 1 January 2008 and 15 October 2013, Barclays’ systems and controls over its FX business were inadequate. These behaviours included inappropriately sharing information about clients’ activities and attempting to manipulate spot FX currency rates, including in collusion with traders at other firms, in a way that could disadvantage those clients and the market.

Barclays and other firms are already participating in an industry-wide remediation programme to ensure that they address the root causes of the failings in their FX businesses and that they drive up standards.