A recent survey confirms that the trend to consolidate cash and trade businesses into one transaction banking group is continuing.
Results from the survey, which was conducted by Misys and includes responses from more than 120 respondents across 45 countries, suggest that the theme of reducing IT complexity and costs remain the dominant concerns for transaction bankers.
77% of participants said that they had started consolidating at least trade finance and cash management businesses to achieve this goal.
At the same time, 45% describe their infrastructure as multiple core processing systems, underlining that the industry has a long way to go before true consolidation happens, Misys says.
Commenting on the survey, Olivier Berthier, Misys global solutions director, transaction banking, says: “This is the third survey we have done in this area and each time we have seen an increase in the proportion of banks bringing their cash, trade and payments businesses under one umbrella, across all regions and from banks of all sizes.”
“However, few have actually successfully integrated their online channels, back-office operations and payments processing fully. In both the survey and our ongoing exchanges with financial institutions, the need to reduce costs, increase the return on capital, improve customer service, and rely on technology as an enabler, all remain key transaction banking trends this year.”
Meanwhile, 43% of participants listed online channel development as the top transaction banking priority for next year, reflecting the trend towards enhancements of the online delivery of cash management and trade finance in a unified fashion.
Adding new products and services remained the top strategic focus for banks managing their transaction and cash management business over the next three years, gathering 26% of respondents.
35% listed a simplified process for making changes to payments standard across all systems as their top priority.
34% of participants said that increasing IT and system complexity was the major challenge facing their bank’s transaction banking group, followed closely by 33% who see increasing regulation as the major challenge.
Demands from corporates to be able to check payment flows manifested in 25% of those surveyed, who stated that real-time payment tracking was their top priority in payments.
Trade services functionality narrowly beat cash flow forecasting tools in the priority list with 14% and 13% respectively, confirming the prominent status and importance of trade finance in a bank’s service offering today, Misys says.
Almost half of those surveyed, describe their infrastructure as multiple core processing systems, which echoes the growing interest in payment hubs to help banks centralise and streamline their payment processes.