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 the growth from the prior three years. In 2021 challenges remained, driven by decreases in cash management revenue, while trade finance revenue increased moderately. A snapshot of recent earnings announcements from five US-based banks tells a mixed story, with 3 out of 5 banks, seeing growth of between 6-15%, and the other 2 banks experiencing a decline of 4 to 12%.
But fear not, despite a mixed revenue outlook, the segment remains very attractive, with stable revenues, sticky client relationships, low capital requirements, and a solid funding source for the bank.
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's "Optimizing, Expanding, and Monetizing: Regaining Transaction Banking Revenue Momentum" report outlines three technology-based strategies for banks to regain transaction banking revenue momentum.
As we close out January, corporate banking technology priorities for 2022 and beyond are becoming increasingly clear, driven by a desire to return to growth. Celent's"Technology Trends Previsory: Corporate Banking, 2022 Edition" report summarizes Celent’s guidance to clients for five key industry themes and 12 resulting trends. It draws on some of the insights we have published throughout this year, but much of the content is new, representing our research agenda for 2022.
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