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Generating a Win-Win in Transaction Banking: Opportunities to Fill the Gaps between Corporate Demand and Bank Supply

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26 September 2021
Alenka Grealish
Kieran Hines

Abstract

Faced with shrinking margins and a tech arms race, corporate bankers need to make smart investment decisions. Celent analyzes banker and corporate client survey insights to glean critical take-aways that can inform bankers' smart decisions.

Generating a win-win in transaction banking has become an imperative. Win-win means aligning bank “supply” of services with corporate “demand.” Bankers win if they improve their understanding of corporate needs, deliver on those needs, and generate new revenue streams. Corporations win as banks help them improve their operational efficiency and make better decisions. To identify win-wins, Celent analyzes the results of a global survey of transaction bankers and their corporate clients. It finds numerous opportunities to fill the gaps between corporate demand and bank supply. These opportunities also represent threats, however. If banks do not fill these gaps, corporations will seek out new partners, including non-bank players.

Our critical take-aways include:

It is game on for banks to seize opportunities and avoid attrition risk

• 35% of corporations cite bank relationship rationalization as one of the most important focus areas.

• 70% plan to form relationships with new bank and non-bank partners.

There are clear opportunities for banks to monetize new services and value propositions

• 70% of corporations want partners that can improve their operational efficiency.

• 32% view data-led insights as one of the service enhancements that could bring the greatest value.

• Accordingly, their relative willingness to pay for services that improve decision making is also high (e.g., improvements to cash visibility, real-time cash forecasting, and multibank dashboards).

A minority of banks are in the win-win lead.

• 42% are offering the products/services that support operational efficiency.

• 44% support better decision making.

While there is strong opportunity for proactive banks, the threat from new entrants is real.

• 75% of corporations plan to work with new providers for data-led services.

Building corporate relationships from a demand-side perspective—improving operational efficiencies and powering better decisions—is a dramatic paradigm shift away from the traditional product-centric strategy for bankers.

Banks that can excel in either or both areas will realize competitive differentiation. There is particularly strong opportunity to get ahead in powering better decisions.

• 52% of banks report that their primary use of transaction data is security-related.

• Less than 4 out of 10 view transaction data as a launch pad for developing a new product/service.

Celent identifies demand-supply gaps, revealing opportunities for banks to differentiate themselves and generate new revenue streams as detailed below.

In addition, Celent showcases eight exemplars in improving clients’ operational efficiency (Goldman Sachs, RBC, Santander, and Wells Fargo) and in powering better decision making at clients (Citi, DBS, J.P. Morgan, and Sage).

Client Access