Banks are very interested in the blockchain at the moment, the technology that underpins digital currency bitcoin.
The technology has the potential to make money transfers faster and cheaper, as well as having potential revolutionary applications for everything from stock issuing to the diamond trade.
22 of the world’s leading investment banks have formed a partnership to look at how the blockchain can be used in traditional banking.
But the former head of Barclay’s technology division in Europe, the Middle East, and Africa says it is just a “cynical” attempt to try and control the technology.
Watson told Business Insider: “I can tell you, it’s the most cynical thing I’ve ever seen. What they’re going to do is what they always do — form a little consortium to block.”
Anthony Watson believes the banks are trying to build their own proprietary internal blockchain that will deliver benefits for them but not customers and stop fintech challengers from taking them on.
Watson says: “The blockchain is fundamentally transformative, it blows up banks business models because they can’t charge people the same astronomical fees. So they’re forming this to block people. And that’s all it is, it’s a cynical tactic to block people and stop people innovating.”
Watson spent 12 years working in banks, running technology at Citi, Wells Fargo, and Barclays. He now heads Uphold, a fintech company that allows free international money transfers using blockchain technology.
Banks like Barclays and Santander have tried to tap into the booming world of fintech, or financial technology, more broadly through investment and mentorship. But Watson also believes these are simply self-interested gestures.
He says: “The way they [banks] talk about it ‘oh we have all these incubators’ — you’re not doing it because you’re nice people, you’re doing it because your business model is going to be eroded the way the publishing industries model was eroded.
“They will try and control it but I don’t think they will be able to. The banking model of today will be fundamentally different 10 years from today. It’s not a sustainable business model.”