July 23, 2024 — Transaction banking in Asia has historically been manual, paper-based and slow to change. Today, however, digital platforms are emerging as a primary driver of both service delivery to corporates and revenue growth for banks. 

In Asia, transaction banking has “digitized” at a slower pace than other aspects of the corporate banking and financial industries, but digital capabilities are now increasing in importance among Asia-based corporates looking for new providers for transaction banking. In 2023, 51% of Asian corporates cited digital as an important criterion when selecting a cash management provider—up from 40% in 2019, according to data from the Coalition Greenwich – 2023 Digital Transformation Benchmarking Study. A similar trend is evident in trade finance, with a fourfold increase from 11% to 39% over the same time period.

In addition to winning new clients, superior digital capabilities are also helping banks expand their wallets within existing transaction banking relationships. 

“In Asia, there is a strong correlation between digital excellence and business growth – the better a bank is rated in their digital offerings, the more likely they are to earn more business from a client,” says Elijah Lim, Asia-Pacific Digital Benchmarking Lead at Coalition Greenwich and co-author of Winning Through Digital in APAC Transaction Banking. 

Traditionally, large global and regional banks have been ahead of the rest of the industry in Asia when it comes to developing a digital strategy for their transaction banking franchises. For many of these banks, the primary focus with early investments was building out front-end user experience/user interface (UX/UI) capabilities. This has generated good returns, as corporate treasurers in Asia typically evaluate the digital prowess of their banks through the UX/UI of their online platforms. 

“Today, there is increasing pressure on banks in Asia to build deeper digital functionalities through digital transformation strategies specific to transaction banking,” says Parijat Banerjee, Head of Asia-Pacific at Coalition Greenwich and report co-author.  “Corporate clients are looking for substance in addition to style.”

Winning Through Digital in APAC Transaction Banking analyzes how digital transaction banking is growing and evolving in Asia, assesses how digital capabilities are driving performance and revenue growth of banks, and presents best practice recommendations based on examples from banks deemed digital leaders by Asian corporates.