Banks can increase revenue despite stricter
banking regulations by upping investment in their transaction
banking businesses.
Research from consultancy firm Aite Group
estimates that investment could increase banks’ transaction banking
revenue from less than five percent to as much as 30 percent
by 2025.
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The recent formation of the Independent
Commission on Banking in the UK and initiatives in the US and EU
has led to speculation banks in many countries could be forced to
split retail and investment banking operations.
Fundtech, a cash management and payments
outsourcing business, believes banks need to “urgently”
consider the impact new regulation could have.
“Due to regulation, if revenues were to dry up
or shrink elsewhere, banks will need to place greater emphasis on
transaction banking solutions,” said a Fundtech spokesperson.
“Many banks are still in the stone age for the
products they offer corporate customers, maintaining retention
levels by making it difficult for clients to leave, rather than
offering the best-in-class solutions which encourage clients to
stay.”
