LONDON (Reuters) - Barclays (L:BARC) said it has set up a venture capital-style unit to drive innovation and returns within its UK business.
The British bank has struggled to deliver on its growth strategy after a decade of restructuring, with investment banking at the core of Chief Executive Jes Staley's plan for higher returns, despite an underwhelming performance.
Barclays UK Ventures, which will be led by former head of group strategy Ben Davey, will focus on developing new business lines, promoting innovation and driving returns.
The bank will build a team of technologists, developers and entrepreneurs that, working closely with Barclays UK operations, will form partnerships with or take equity stakes in technology firms, Davey said in a statement on Monday.
"The way we will work as a team will look and feel very much like a start-up or scale-up operation," he added.
Barclays has come under growing investor pressure to realize profits, with activist investor Edward Bramson expected to ramp this up after taking a stake last month.
Davey told the Financial Times that he hoped the unit could add billions to the bank's revenues by 2025.
He said it will explore new technologies like artificial intelligence with the aim of developing at least one transformational new product line.
Barclays joins a number of European peers like Santander (MC:SAN), which also has a venture capital-style arm, in ramping up its investment in financial technology.
Others such as Royal Bank of Scotland (L:RBS) have also set aside hefty technology budgets and pointed to plans to partner with smaller fintech firms, which pose a growing threat to banks thanks to their rising popularity and changes in regulation.