Corporate Banking: Driving Growth in the Face of Increasing Headwinds

by Patricia Hines, October 9, 2015
Industry Trends
Global

Abstract

In the face of increasing headwinds from a slowing global economy, higher compliance costs, increasingly global corporates, and competition from both banks and nonbanks alike, corporate bankers must carefully manage the ongoing impact of external forces. 

In the report Corporate Banking: Driving Growth in the Face of Increasing Headwinds, Celent looks back on corporate banking performance over the past 10 years, a period of both tremendous growth and unprecedented upheaval. Corporate banking operating income and customer deposit balances have experienced healthy growth rates over the past 10 years. But in the past few years, despite increases in customer deposits, corporate banking income was stagnant.

In 2014, corporate banking was responsible for 33% of overall operating income and 38% of customer deposits across the 20 banks included in this analysis.

The report examines four external forces shaping corporate banking performance: economic conditions, the regulatory environment, business demographics, and financial technology. These same factors are slowing corporate banking growth and creating an environment in which banks are overhauling client offerings in the face of regulatory pressure, re-evaluating geographic footprints in response to shifting trade flows, and investing in technologies to ensure a consistent, integrated customer experience.

“As they look to an unsettled future, corporate banks who are flexible, adaptable, and creative will be the ones who succeed,” says Patricia Hines, a senior analyst with Celent’s Banking practice and author of the report. “Changing time-tested ways of doing business is painful, but critical for future success.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

Background

5

 

A Steady, Stable Source of Fee and Interest Income

5

 

A Dizzying Array of Products and Services

7

 

A Global Shift from West to East

8

Global Trends

10

 

Corporate Banking Performance

10

 

Economic Conditions

13

 

Regulatory Environment

15

 

Business Demographics

17

 

Financial Technology

19

Corporate Banking Outlook

21

 

Corporate Banking Performance

21

 

Economic Conditions

22

 

Regulatory Environment

22

 

Business Demographics

22

 

Financial Technology

23

The Path Forward

25

 

Recommendations

25

About the Analysis

27

 

Banking Institutions

27

 

Corporate Banking Lines of Business

28

 

Foreign Exchange Impact

30

Leveraging Celent’s Expertise

32

 

Support for Financial Institutions

32

 

Support for Vendors

32

Related Celent Research

33

Sign in to download reports and access personalized information