New Frontiers Conference: Jes Staley Opening Remarks 02 Nov 2017 13:23 Welcome, and thank you for joining us at our New Frontiers Conference. The new title for this event – which was generically branded as a digital conference in years past – reflects the fact that innovation for our customers and our clients stretches beyond the boundaries of just technology. We wanted to ensure that the thinking and ideas we surface today were not constrained in any way - including by the title! Our first session this afternoon is a conversation between myself and Rob Kapito from Blackrock which I’m really looking forward to. But before we get into that, let me offer just a couple of brief thoughts on how we’re thinking about the world we operate in right now. The Age of Disruption? It can often seem that we are living today through an age of disruption. Innovation and technology are creating huge social and economic forces. Their impact can often be unclear. And not always benign. These complex and powerful forces are rippling through society. Upsetting old political certainties. Giving rise to what is being called ‘populism’, even though that takes numerous forms. They are disrupting sectors as diverse as Retail, News, and Taxis – and also of course banking. The rise of Automation and Artificial Intelligence greatly accelerates the scope for further disruption. And of course the great dislocation of the financial crisis and the response to that is still working its way through our societies. These disruptive forces are reshaping our world. They can be creative, and sometimes destructive. They can throw off-balance those dealing with the immediate economic and social impacts of rapid change. And that’s important for all of us to consider. As business leaders, it is our obligation to be constantly attentive to the communities most directly affected by that disruption, as well as focusing on what it means for our companies. Because if we fail to do so, these changes will almost certainly fuel even greater uncertainty and insecurity across the world. But if we can recognise that obligation, and respond accordingly, then innovation and technology can herald a period of profound and optimistic global change. At the heart of that optimistic future, I believe, is a new age of connection, where technology, infrastructure, and finance, will once again come together to reshape our world for the better. The new Age of Connection These are – and have been - the three great connectors at the root of much of the progress that we have seen since the industrial revolution. Through history, they have helped lay the foundations for long periods of growth and prosperity. For example, the coming of the railways saw a combination of technology in the form of steam engines, the infrastructure required to run them on, and the finance to build that infrastructure – and so led to the transformation of industrial Britain, and the American continent. And Barclays was there at the start, as you would expect, funding the Stockton to Darlington railway in the UK. The post-war period again saw finance supporting reconstruction and technological development in Western Europe and Japan. This stimulated rapid advances in engineering, electronics, automation, and with them, industrial and social progress. It is not a coincidence that these two examples took place during periods in which finance – the profession of banking – was trusted and highly regarded. Bankers were doing what we are supposed to do – supporting growth in the real economy – and our reputation back then reflected that. What does connection look like now? There are clear signs that we are on the threshold of another great age of connection today. Technological change, of course, is all around us. Communications and social media are multiplying connections in ways unimaginable just twenty years ago. Handheld computing power is enabling businesses and whole economies to leapfrog generations of development, as the growth of banking services powered by mobile has shown in Africa. The tools of this technological change are more accessible than ever, creating a new age of innovation and creation. In Automation and in Artificial Intelligence we can see the potential for transformative effects across a range of sectors. As I said, we need to recognise that these are not impact-free changes, and they bring challenges. The potential opportunities inherent in them come at a price. And that price is that we must pay due regard to the human and social impact of technological change. We will need conversations in our societies about data, security, and the future of work. About how we balance technological developments and advances with the dislocation they bring. We can’t ignore that dimension. Because, the alternative is the far greater disruption caused by social, economic and political dislocation. But if we can successfully navigate and mitigate these risks, the potential is clear in technological advances. The impact of exponential computing power coupled with machine learning is huge. It will continue to shape and reshape some areas of our lives over the coming decades. The second connector is infrastructure and in that too, we are on the cusp of an extraordinary acceleration in investment. Infrastructure spending currently stands at around 3 trillion dollars per year globally. It is projected to rise to around 9 trillion dollars by 2025. Much of that is skewed towards Asia, but there are signs that much-needed infrastructure investment is also beginning to accelerate in the west. And new non-state actors are starting to build significant global infrastructure of their own. The Marea transatlantic cable completed in September, for example, is 6,600 km of the highest capacity cable ever to connect the US and Europe. It is jointly owned by Microsoft and Facebook. And capable of transferring 160 terabits – the equivalent of 5,000 high resolution movies – every second. A decade after the crisis - and after huge investment in strengthening the global banking system - finance is playing its part too. As banks have rightly built up capital and adapted to new regulation, it has largely fallen to central banks to support economies. They have done that with considerable success. But the shift has come with some negative consequences, not least creating something of a dependency. That era of central bank support is now coming to an end. And in its place banks have to step up and make the capital markets work for the real economy. What does this mean for Barclays? I have committed Barclays to playing our part in that. Our role in forging those connections and supporting growth is at the heart of our vision for Barclays. As a transatlantic bank, with home markets in the UK and the US, we are already a major connector of the two great centres of the global financial network. We are helping to support innovative solutions to infrastructure investment here in the UK through our involvement in the Northern Powerhouse, for example. We share the vision of connecting the great cities of the north and unlocking their further potential. And we are major providers of critical payment infrastructure in our own right, through our international cards and payment business. Connecting to customers – agenda comments and conclusion As you would expect we are very focussed on the human dimension. Our close relationships to our customers and clients has been at the heart of Barclays’ success through 327 years. It is at the heart of our approach to technology and innovation today. You see it in the enormous investment we make in security. The aim is for our customers and clients to be certain that their data is as safe in our care as their money. That means they can take advantage of new technology with confidence. You see it too in the work we do to integrate technology into our customers’ daily lives. From our leading Barclays mobile banking app to BPaid, our new integrated payments platform. What is most important to us in these innovations is not the technology, but what it means for our customers and clients. What it enables them to do. So, we need to address some real challenges and to remain focussed always on the impact of change on people and communities. But if we do that, then I am enormously optimistic about the potential for innovation in a new age of connection, and very excited about Barclays’ role in that. It’s a real privilege to be able to spend time with you to explore some of those themes, and others, in more depth today. And now it is my great pleasure to introduce Rob Kapito. Rob is President and a Director of BlackRock, a member of BlackRock’s Global Executive Committee, and Chairman of the firm’s Global Operating Committee. He is responsible for day-to-day oversight of all of BlackRock’s key operating units including Investment Strategies, Client Businesses, Technology & Operations, and Risk & Quantitative Analysis. Rob serves as a member of the Board of Trustees of the University of Pennsylvania and the Harvard Business School Board of Dean’s Advisors. It is a privilege to have him with us today to share his thinking on new frontiers. Please welcome him to the stage. About Barclays Barclays is a transatlantic consumer, corporate and investment bank offering products and services across personal, corporate and investment banking, credit cards and wealth management, with a strong presence in our two home markets of the UK and the US.With over 325 years of history and expertise in banking, Barclays operates in over 40 countries and employs approximately 85,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.home.barclays .