New year’s resolutions for the transaction banking industry

By:
Rebecca Brace
Published on:

Six transaction bankers wax lyrical about the outlook for 2013, from the establishment of the Single Euro Payments Area (Sepa) to the talent gap.

Sepa

With only a year to go before the Sepa end date, Sepa compliance is set to be a priority for banks and corporates alike.

“We will be helping clients who have not done so already migrate to Sepa payments, so they can conduct their business under the new rules as efficiently as possible,” says Etienne Bernard, head of transaction services EMEA at RBS.

Dieter Stynen, Deutsche Bank’s head of cash management corporates western Europe and head of global transaction banking, Belgium, adds: “Corporate clients should have realized by now that Sepa needs to be at the top of their agenda for 2013 if they are to meet the February 2014 deadline.”

Stynen points out that “for corporates of all sizes, the major compliance difficulties lie in the adoption of the Sepa direct debit, which is a brand new instrument containing its own set of rules and formats, and changes to account identifiers and payment file formatting”.

With a large number of companies expected to begin implementing Sepa during 2013, this is set to be a hot topic for banks and corporations this year. However, while Sepa is likely to take centre stage in Europe, it is not the only priority for transaction banks in 2013. A survey of transaction bankers published by technology vendor Misys in 2012 found that adding new products and services will be a strategic focus for 80% of respondents in the next three years, while 71% aim to improve customer service.

Client focus

It goes without saying that meeting clients’ needs will be a priority for transaction banks in 2013 – but what are corporations aiming to achieve in the coming year and how can banks help?

“In an increasingly challenging and complex environment, transparency, visibility and efficiency have become elements of critical focus,” says Francesco Vanni d’Archirafi, global head of Citi transaction services. “Our clients value a reliable transaction services partner that helps them optimize their balance sheets and drive growth through greater control of their financial operation and supply chains.”

In addition to helping clients migrate to Sepa, Pierre Fersztand, global head of cash management at BNP Paribas, says the bank will be working to develop new services and harmonize its offerings for clients in 2013. “We will be improving flexibility and investing a lot in our connectivity hub to make it flexible in adapting to different formats and reporting methods,” says Fersztand. “We will also be leveraging our local capabilities – in other words, adopting the mindset of a local bank.”

Internal consolidation

Meanwhile, banks continue to consolidate corporate services with a view to improving the customer experience.

“We recently put together corporate banking, investment banking and treasury services to form the corporate and investment bank,” says John Gibbons, head of JPMorgan treasury services in EMEA. “The corporate and investment bank has a large multinational client base, and treasury services is an important part of our business – transaction banking relationships are probably the most intense of all with an almost daily velocity of client calling. The idea is to use this velocity to improve client relationships and better serve client needs.”

Collaboration

Cross-industry collaboration will be essential in 2013 to overcome economic and regulatory challenges, according to Carole Berndt, head of global transaction services EMEA at Bank of America Merrill Lynch.

Carole Berndt
Carole Berndt, head of global transaction services EMEA at Bank of America Merrill Lynch

“As bankers, we also have an interesting relationship with each other, as both competitors and partners,” says Berndt. “Our clients’ needs are increasingly sophisticated and geographically diverse, and no single bank can be everything to everyone. Collaboration is essential to delivering these solutions, and will help redress the stability of the financial markets with more companies returning to build over band-aid mode.”

Berndt also believes that banks will need to work together to address the treasury services talent gap. “In today’s new world order, there are some exciting opportunities for career development and growth as the role of the treasurer continues to develop,” she observes.

“However, demand for talent currently outstrips the available supply, because until very recent times, students generally favoured more traditional investment banking or trading roles. Industry-wide, we need to ensure that the brightest men and women actively consider treasury as a career from the time they embark on internships and graduate.”

Outlook for 2013

The banking industry, as a whole, has had a disastrous few years – but Vanni d’Archirafi is bullish on the coming 12 months for the transaction banking industry.

“The future is bright, with great opportunity for those players that demonstrate continuous commitment to making transaction banking strategically relevant by leveraging some of the fundamental changes shaping the industry such as globalization, urbanization and digitization,” he says.

Nevertheless, the transaction banking industry faces numerous challenges in 2013 – including the raft of new regulation, which will demand a substantial investment of time and resources across the industry in the coming year.