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Opinion Updated: 25 June 2021

A major boost for transaction banking

Eva Rubio, the Head of Global Transaction Banking at BBVA, tells us about the current challenges facing the transaction banking business, reviews recent technological advances and explains the bank’s strategy to stay ahead of the competition.

The transaction banking area, subjected to the fast pace of change in the industry, is immersed in a period of transformation. Without a doubt, the sector is focused on improving the paradigms that have shaped the way the transaction business has been conducted in the past. An example that illustrates this behavior is the reduced “time-to-market” in many processes, such as real time payments or dynamic pricing, for instance. Special emphasis is also being placed on improving advisory services and user experience through transparency, traceability, simplicity, operational efficiency and multi-channels.

Of the levers that foster innovation and propel transformation in this business, the following are worth noting:

  • Growth. Unlike wholesale products, the transaction business has grown on a recurring basis in recent years, and forecasts indicate that it will continue to do so. Rising competition and the focus being placed by banks have been critical in making it one of the most profitable businesses in the wholesale industry.
  • Transformation. Our clients are transforming, and are therefore demanding more innovative, more accessible and simpler solutions. We must respond.
  • The fintech world. These actors are like innovation catalysts, launching new processes, technologies and soft skills that allow us to deliver products with significant improvements in efficiency levels and user experience.
  • Regulation. Through Open Banking and APIs (‘Application Programming Interface), regulation has provided controlled spaces to boost innovation.

Technology, key in the transformation

In this environment, emerging technologies offer new possibilities to tackle the transformation trends. First, cloud technologies are key to generate economies of scale in a world with immense transaction growth and the arrival of new channels like cell phones. In terms of efficiency, they also make it possible to optimize the management of transaction peaks, and the efficient and rapid management of orders and massive processes.

In addition,  there are also NoSQL technologies, which provide us real time analytics of use cases, projections, flow and transaction analysis; and technologies that improve the customization of the transaction advisory service, like big data, artificial intelligence, machine learning and deep learning, which makes it possible to enhance insights and dynamic pricing.

Finally, the role played by blockchain is noteworthy. With several pilots carried out, its potential is being explored in complex environments where security and traceability are fundamental.

Corporate transaction banking, driver of growth

For BBVA Corporate & Investment Banking, the transaction banking business is essential. It has been historically and we will continue working to ensure it remains that way, offering our clients exceptional service. To do so, we have set three objectives we plan to reach in the coming months.

Promoting the cross-border business in different countries is crucial. It is one of the sources of growth that allows us to accompany global clients, and the reason they choose us. Our presence in Latin America, the U.S., Turkey, Europe and Asia enables the connection to trade flows and the main corridors of global trade.

Specialized solutions, or transaction advisory services, represent another priority in our agenda. We obviously want to offer our clients the best service, but we can only do so by keeping them at the heart of our business. We have to understand their ecosystems and needs much better, while being much more proactive and innovative in the solutions we offer them.

Last but not least, we will continue investing in improving local and global platforms to combine the day-to-day business with transformation in the medium term.

This is how BBVA intends to remain ahead of the competition and propel the industry’s transformation, which, despite the many challenges, will also definitely present many opportunities.