Although transaction banking, which manages cash for companies and finances trade and supply chains, has proven to be profitable for banks, it ranks low in consumer satisfaction. Mike Baxter, who leads Bain's Financial Services practice in the Americas, describes why now might be the time for smaller banks to capture market share with a digitally focused customer experience.
Read the Bain Brief: Wolf in Sheep's Clothing: Disruption Ahead for Transaction Banking
Read the transcript below.
MIKE BAXTER: Transaction banking is an area that's ripe for disruption. It's a business that historically has had ROEs north of 20% and been very profitable, but an area where client satisfaction has been low. A recent study in North America suggested that 60% of clients were either dissatisfied or very dissatisfied with their payment services and the financial institutions. The reasons behind that are slowness, complexity of processes, and opaqueness of fees and pricing.
Now, new technologies are offering opportunities to really change the game. Distributed ledger or …