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The future of transaction banking

A survey, recently conducted jointly by SWIFT and IBM, reveals that transaction banks are focused on improving risk capabilities and braced for the impact of increased regulatory obligations – and will marshal IT and shared services as the foundation for ongoing success.

The global financial crisis threw into stark relief the industry’s failure to properly manage risk. In the wake of the crisis, transaction banks are determined to address that shortfall, and are focusing heavily on improving their risk management capabilities. They also - rightly - anticipate having to comply with a slew of new regulatory obligations.

The twin pressures of risk and regulation are among the factors driving transaction banks to make investments in IT. There are some clear differences in emphasis in IT spending by payments businesses on one hand and securities business on the other, with securities players focused more on reinforcing existing capabilities, and payments players more on innovation.

In order to concentrate on their competitive differentiators and free up resource to cope with new regulatory requirements, transaction banks are also looking to exploit outsourcing and collaborative solutions to maximize the efficiency of commoditized functions such as back office processing. These are just some of the key findings of a survey conducted by IBM and SWIFT during July 2009. Almost 1200 business and technology executives from around the world - representing more than 600 banks, asset managers, regulators, back office processors and corporates - responded to the survey, which solicited their views on the future of the financial services industry, payments, cash management and trade services, and custody and securities processsing.

To view the full survey of findings click here (PDF, 1.59MB).