Rise of the machines

19 April 2013 By Dominic Elliott

Forget financial models derived from quantum physics. The solution to low returns in banking may be found in the car industry of 30 years ago. A production-line revolution replacing people with machines could drive profit in a low-growth world. But society may suffer for it.

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Barclays Chief Executive Antony Jenkins said on March 19 that it was important to think “like an industrial process engineer” in attempts to save costs, citing the example of a leading carmaker in Japan “reducing the price per car by 10 percent and general expenses by 20 percent while improving quality through simplification and automating manual processes”, according to the text of a speech he gave to a Morgan Stanley investor conference.
Jenkins told shareholders that he could imagine a world in which the bank employed fewer than 100,000 people in a decade’s time, down from 140,000 currently, Sky News reported on March 7.

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