Three quarters of financial institutions globally will be looking to establish new transactional banking relationships over the next 12 months, including 28% that are looking to change and/or add a ‘wide range’ of banking partnerships to their portfolio of preferred partners.
The findings of a Barclays Commercial survey of leading global financial institutions at symposiums, held in the financial sector hubs of London, Frankfurt, Dubai and Singapore, also revealed that London had the greatest number of financial institutions looking extensively for new transactional banking arrangements.
The survey found that the greatest consideration when choosing commercial banking partners was service and processing standards (43%), a greater consideration than the general performance of the bank (33%), the product suite available (15%) or the concentration of banking risk (11%).
In comparison to the volatility in transactional banking, foreign exchange is set to offer a more stable platform in the coming 12 months, with 67% of executives in financial institutions predicting global exchange rates will be less volatile than in the previous year.
Colin Nutt, head of financial institutions, Barclays Commercial, said: “These results suggest that there is huge opportunity for those banks that are proactive in their drive to bring in new bank to bank business. We’re seeing a renewed confidence amongst financial institutions and therefore greater focus on growth and longer term strategic relationship building.”
The vast majority (85%) of those polled also considered the changing dynamics of the regulatory environment to have a significant impact on the sector as a whole and 60% believe new regulations will have a significant impact on their banking relationships.
Other survey findings include:
- 49% believe the likelihood of charging for intraday liquidity will become market practice within the next two years. Fifteen percent predict this will never happen.
- Only 10% of respondents believe foreign exchange rates will be more volatile over the next year, when compared with the previous.
- A significant majority (76%) of respondents claim their bank is not actively considering outsourcing payment processing.
- 14% of respondents claim their bank is currently actively considering or implementing outsourced payment processing.
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