The Changing Face Of Transaction Banking

Transaction banking is a veritable money spinner for banks with strong corporate banking focus. What are the new trends in this domain? Heads of two private banks speak about their respective operations

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Transaction Banking by definition is a suite of products targeting the key corporate needs for working capital optimization. These products invariably integrate cash, trade finance, payments and to some extent forex. With supply chains becoming global, corporates are pushing banks to provide transaction banking products that are of benefit to them, of convenience to them. They look for greater value from banks by way of solutions that combine various traditional products, custom-made products, multibank aggregation, interaction across functions like payments, trade, cash and liquidity even as a central control is very much in place. The need is for seamless and end to end solutions and for data that concerns their working capital, their cash requirements, payments, etc.

In fact, it is a dashboard that these customers are expecting. To some extent, the transaction banking that some of the banks offer today does provide such conveniences.

So, for banks, transaction banking is an effort at reorganizing several disparate transaction-based activities into a single commercial business unit, giving a global reach, intelligent customer segmentation and better external communication.

Have banks in India been able to cater to these disparate requirements? We examine the salient aspects of the products and services offered by two banks - which are totally different in their structure, in their operations and in their approach to customers.

3 MAIN STREAMS