With technology developments occurring at a rapid rate, Christopher Mager of BNY Mellon Treasury Services, discusses some of the key innovations that are impacting transaction banking, and how knowledge is king when it comes to harnessing new capabilities.
Many forces are driving significant change in transaction banking – from regulation, to the rise of the millennials in the workforce, and increasing globalisation and connectivity. Yet, one force in particular is having a disproportionate effect on the financial services industry: technology.
The emergence of fintechs is contributing to the speed of technological change in banking, with a surge of new tech savvy start-ups entering aspects of the banking space with designs on transforming existing processes. Although initially viewed as threats to banks, fintechs have come to realise that banking is one of the most entrenched of all industries. Banks have developed exceptional skills in areas including client relationship management and operating efficiently at scale while managing appropriate operational, audit and regulatory controls. Subsequently, with the value and strengths of both parties firmly established, banks and fintechs have increasingly begun to collaborate in what some refer to as a ‘fintegration’ approach.
Whether strategies involve banks on their own, banking partnerships or partnerships with fintechs, what is clear is that, as an industry, we are being presented with opportunities like never before to innovate and transform the businesses we operate – by leveraging the array of emerging technologies that is increasingly at our fingertips.