Special Report | Global Transaction Banking 2015 Preview

Author: Rebecca Brace


On the technology front, transaction banks will be building out existing products and solutions, as well as investing in innovations. Christine Barry, research director of wholesale banking at consultancy Aite Group, predicts that investments in transaction banking technologies will increase in 2015, as many institutions are still running outdated and siloed solutions. User experience is likely to be a particular focus. “Banks are moving forward with next-generation corporate portal strategies to provide a more integrated experience for customers, as well as launching new dashboards that put greater control and levels of customization in the hands of the end user,” she says. Corporate executives are looking for single-portal access to all of a banking partner’s services and solutions, and an easy-to-use, intuitive interface with simple access to all of their most pertinent data, presented in a graphically pleasing, interactive and straightforward way and customizable to the individual user’s needs and job function. They want increased self-serve options—they don’t want to just look at their data, they want to be able to make use of it.

Mobile banking is likely to be a key theme in 2015 according to Barry. “Today less than 10% of corporate treasurers bank via a mobile device,” she says. “This percentage will grow during 2015, as more banks roll out smartphone and tablet offerings, and concerns around security become less of a barrier.” Barry adds that the mobile channel will be used for more than simply urgent transactions.

BofA Merrill’s Williams adds that one of the main developments set to continue into 2015 is the increased level of collaboration between financial institutions and other technology providers. “In the past, a lot of the burden for corporates was to create a new technology solution, often by pulling together traditional enterprise resource planning (ERP) or treasury workstation (TWS) systems with newer point-of-sale solutions in their own back office,” he says. “As a transaction bank we are now working more proactively with other players in the ecosystem to provide clients with greater levels of integration.”

Meanwhile, working capital management is becoming a higher priority for corporates operating in Asia, according to John Laurens, managing director and head of global transaction services, DBS Bank. “Driven by the need to sustain a competitive advantage amidst challenging market conditions, corporates are working with their transaction banks to identify and remove inefficiencies in their physical and financial supply chains at an intensity not previously seen,” he says.

Laurens adds that banks have extended their offering in this area by developing working capital advisory platforms that provide a range of value-added services, including industry benchmarking analyses and market insights as well as innovative digital solutions enabling corporates to drive improvement in their cash conversion cycles—such as host-to-host bank-to-ERP connectivity and online letter of credit applications.

Aside from these developments, a further effect of the changing regulatory environment could be an even greater focus on transaction banking within financial institutions. Transaction banking has already enjoyed a higher profile of late as its stable flows became more attractive following the financial crisis and regulatory changes that have affected other parts of the business. In 2015, Barry predicts, the importance of transaction banking within financial institutions will continue to rise, given the potential for new streams of revenue to replace those lost by recent regulations.