TRANSACTION BANKING, THE process of facilitating buying and selling for companies and financial institutions, has never been the most glamorous of activities. To be sure, parts of the business might be able to claim romantic origins serving the merchants of Renaissance Italy while, at the same time, the contemporary industry is driven by the type of kit that is inevitably accompanied by hyperbole about bleeding-edge technology. Nevertheless, the reality of transaction banking has been prosaic. Contract periods are long (for corporates anyway) resulting in a business cycle that seems positively lethargic compared with the cut and thrust of capital markets, for example. Moreover, despite liberal use of sophisticated widgets, much of transaction banking is broadly the same as it was five, 10 or 20 years ago – after all, the broad goals of companies and investors scarcely change.
As a result, although most large banks have always had big transaction banking businesses, what they actually did was seldom understood by the rest of the bank.