Transaction banking is valuable to banks because of the stable returns, sticky client relationships, low capital requirements and because it’s a funding source for the bank.
Following a sharp downturn in interest rates in 2020 which led to a collapse of net interest income on deposits and set transaction banking back years in growth, recent interest rate increases will regain momentum for transaction banking.
As banks seek to regain transaction banking revenue momentum, Celent views technology as both an opportunity and a challenge. Against a backdrop of traditional, vertically integrated bank product delivery models alongside disruptive, agile plug-and-play fintech players, Celent outlines three technology-based strategies for banks to regain transaction banking revenue momentum:
1. Optimizing client engagement
2. Expanding the ecosystem
3. Monetizing underutilized data
The key take-aways
Review of bank-led ecosystems, disrupted front-end models and the non-bank revolution across the value chain
The importance of enhancing client experience, as well as how and why this is becoming even more critical as time passes – and how to differentiate through client engagement
How a bank can take a monolithic traditional architecture stack and turn it into a componentized, loosely coupled banking platform
What the best practice for digital portals is, and how to offer a single, integrated portal with customizable, persona-based dashboards and graphical display elements