Rich Ricci, the former CEO of Barclays Capital, says the rise of financial technology startups over the past few years is not just a flash in the pan but represents “a fundamental shift” in financial services to meet the needs of millennials.
From where I’m sitting, it is clear that the nature of financial services is undergoing a fundamental shift to meet the needs of younger, technology-savvy generations in a much broader pantheon of activities.
Millennials, who have grown up using technology, simply won’t adopt old models if it isn’t in their interests to do so.
The big banks think the same, setting up their own innovation arms to explore opportunities presented not only by P2P but also by mobile and micro-payments, cryptocurrencies like Bitcoin, and distributed ledgers such as blockchain.
Ricci draws comparisons between fintech startups and the likes of Airbnb and Uber, saying “it is now possible for financial transactions to take place on a platform without having a bank or indeed any entity as an intermediary.”
“Technology used to be centralised, with businesses being run on large databases and transaction engines. Today, it is massively distributed — there’s more power on a couple of smartphones than on the International Space Station,” he writes.
Ricci is best known as a one-time lieutenant of ex-Barclays CEO Bob Diamond, who was dubbed the “unacceptable face of banking” by Lord Peter Mandelson in 2010. Ricci and Diamond rose to prominence in Barclay’s investment banking arm, BarCap, which Ricci ran between 2009 and 2013.
Ricci, Diamond, and two other executives were dubbed the “four musketeers” within Barclays, and blamed for bringing “casino banking” to the British lender in the run up to the 2008 financial crisis.
The Independent called Ricci the “poster child for the excesses of the investment banking industry” in 2013 after he sold £18 million-worth of Barclays shares on the day of an austerity budget. That same year, trilby-wearing Ricci entered a race horse named “Fatcatinthehat” into the Cheltenham Festival.
Since leaving Barclays Ricci has kept his head down in the world of finance, instead focusing on his beloved horse racing. However, more recently he has dipped his toe in the water, investing in several fintech startups.
Ricci is an investor peer-to-peer currency exchange freemarketFX and has also joined the board. He reveals in his CityAM op-ed that his has also backed two other fintech startups: betting exchange BetBright and subscription-based equities trading platform Aquis Exchange.
Ricci isn’t the only former Barclays exec getting involved with fintech. Former CEO Antony Jenkins, who came after Ricci’s tenure at the bank, last year predicted an “Uber moment” for banks and is reportedly close to launching or joining a fintech venture.