Trends in Transaction Banking: A Global Survey

by Axel Pierron,  Neil Katkov, PhD, February 1, 2013
Industry Trends
Global

Abstract

Transaction banking has outperformed investment and commercial banking in terms of revenue growth in the post-financial crisis period. To better position themselves for success, 82% of banks surveyed have reorganized their transaction banking operations in the past three years—43% in 2012 alone.

Transaction banking is a growth area for banks, with volumes rising steadily. This is generating intense competition in transaction banking services among regional and local banks as well as global incumbents. In a survey-based study by Celent and sponsored by NTT Data Getronics, Trends in Transaction Banking: A Global Survey, Celent finds that banks are racing to enhance product and service menus; automate processes and increase straight-through processing (STP); and build regional—and global—operational and technology platforms to support their business.

Asia is a particular focus because over half of the international trade in this region is between countries within Asia itself. The high proportion of intraregional trade is providing opportunities for the local banks operating in Asia, where global banks might not have a granular presence, and driving them to enhance their transaction banking capabilities.

“Transaction banking is a stiffly competitive business, with even smaller local banks investing in cash management capabilities,” says Neil Katkov, PhD, Senior Vice President, Asia for Celent and coauthor of the report. “The banks that succeed in meeting new client requirements will improve their competitive positioning not just in their home markets, but relative to the global players as well.”

“After the global financial crisis, corporates have changed their behavior and are increasingly focused on risk and liquidity management,” adds Axel Pierron, Senior Vice President of Celent’s Securities & Investments Practice and coauthor of the report. “This is creating opportunities for banks, and intense competition in transaction banking services.”

The report provides a view into banks’ product, client and regional focus; organizational strategies to strengthen competitiveness; technology investments to support new products and enhance STP; and areas of concern for heads of transaction banking.

This 24-page report contains 19 figures and one table.

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 part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

Background

2

Introduction

3

Size and Scope of Transaction Banking Business

4

Building Capabilities

6

 

Areas of Focus

6

Building Global Platforms

8

 

Adoption of Messaging Standards

9

Improving Straight Through Processing

10

Transaction Banking Technology Spending

13

Future Trends

15

Conclusions

18

Appendix: Survey Background

19

Leveraging Celent’s Expertise

20

 

Support for Financial Institutions

20

 

Support for Vendors

20

Related Celent Research

21

Sign in to download reports and access personalized information