Transaction banking is going to change severely within five years, according to Erik Seifert, head of working capital and liquidity management within transaction banking at SEB.

Seifert told RBI: "The business model in banking will start to change within five years, adopting a similar ‘pay-as-you-go’ model similar to the airlines and the telecos."

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SEB provides transactional banking services to around 600 companies based predominantly in the Nordics and the US, including cash management, and trade and supply chain financing.

"In some ways the new banking entrants are better placed to serve clients transactional banking needs, although being non-banking entities they are constrained as to what role they can play," Seifert said.

The changes going on in the relatively fast moving consumer payments side of the industry will have a knock on effect on the corporate side too, according to Seifert.

Seifert explains: "A lot of our clients do consumer payments at the other end so it will be quite exciting to see what will happen in the consumer space and how it will affect the corporate side.

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"Across the banking industry a lot of the banks are dealing with dated legacy systems and the industry as a whole faces a big challenge in keeping up with client expectations and technology."

The digital revolution has so far affected the corporate transactional banking world less heavily than other areas of the banking industry but some banks are beginning to embrace digital with German based Fidor announcing its use of cryptocurrency Ripple in May 2014.

 

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