Research

Optimizing, expanding and monetizing: regaining transaction banking revenue momentum

Capital markets and investment banking side of the wholesale banking house led the way in revenue growth (26% in 2020), while transaction banking experienced revenue decline. The Oliver Wyman/Morgan Stanley report in 2021 highlights the potential for banks to unlock hidden value in transaction banking with sustainably higher post pandemic returns and outlines transaction banking commercial levers and growth plays.

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Capital markets and investment banking side of the wholesale banking house led the way in revenue growth (26% in 2020), while transaction banking experienced revenue decline. For transaction banking, the sharp downturn in interest rates in 2020 led to a collapse of net interest income on deposits and effectively wiped out growth from the prior three years, with revenue dropping from US$100 billion in 2019 to US$88 billion in 2020, resulting in US$12 billion in lost income. The Oliver Wyman/Morgan Stanley report in 2021 highlights the potential for banks to unlock hidden value in transaction banking with sustainably higher post pandemic returns and outlines transaction banking commercial levers and growth plays. 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. Read the recent report from Celent to learn about optimizing client engagement and deliver, expanding the ecosystem and monetizing underutilized data.

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