Transaction Banking Definition:
Transaction Banking is a set of compliant products, processes and systems to enable core banking functions such as cash and securities management, trade finance, payments, collections, documentary credits etc.
Customer Vs Bank Perspective
From a bank customer perspective it is the ability to perform banking functions, such as cash control, investment, trade etc. However from a bank/organization perspective it might be a vertical/product or set of products/services that enable the bank customers to perform banking functions to help increase banks business and profitability.
The core function of a transaction banking unit is to develop/procure/implement/streamline and enable the customer for core transaction requirements, such as payments, collections, documents credits etc
Different Verticals
Transaction Banking can be categorized into various groups depending on what market requirement it is catering to, such as:
-- Trade Finance (Domestic and international trade transactions)
-- Documentary Credits (Letters of Credit, Bankers Guarantee)
-- Documentary Collections
-- Financial Services (Investment, Stocks, Banking, Insurance)
-- Cash management
-- Investment Services
Summary
Thus we can say that transaction banking allows efficient, complaint and safe movement/management of cash and securities around the global financial system. Depending on the bank/market requirement it may include providing institutional cash management services, facilitating trade finance deals and providing securities processing and agency services to retail and business customers.
Transaction Banking is a set of compliant products, processes and systems to enable core banking functions such as cash and securities management, trade finance, payments, collections, documentary credits etc.
Customer Vs Bank Perspective
From a bank customer perspective it is the ability to perform banking functions, such as cash control, investment, trade etc. However from a bank/organization perspective it might be a vertical/product or set of products/services that enable the bank customers to perform banking functions to help increase banks business and profitability.
The core function of a transaction banking unit is to develop/procure/implement/streamline and enable the customer for core transaction requirements, such as payments, collections, documents credits etc
Different Verticals
Transaction Banking can be categorized into various groups depending on what market requirement it is catering to, such as:
-- Trade Finance (Domestic and international trade transactions)
-- Documentary Credits (Letters of Credit, Bankers Guarantee)
-- Documentary Collections
-- Financial Services (Investment, Stocks, Banking, Insurance)
-- Cash management
-- Investment Services
Summary
Thus we can say that transaction banking allows efficient, complaint and safe movement/management of cash and securities around the global financial system. Depending on the bank/market requirement it may include providing institutional cash management services, facilitating trade finance deals and providing securities processing and agency services to retail and business customers.