Corporate Banking: Driving Growth in the Face of Increasing Headwinds

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.”