How investment banks can raise transaction banking value by 50%

Partnering with fintechs or making front office changes can raise profit by 3%-10%.

Corporate and investment banks working to reinvent transaction banking processes can increase its value by up to 1.5 times through revenue growth and cost optimisation, said McKinsey & Company.

Banks are advised to “invest selectively in innovation” in this area alongside artificial intelligence (AI) and digital assets, the management consulting firm said in a report in December 2025.

Just partnering with fintech companies could raise transaction banking operating profit by 3% to 5%, whilst changes to front-office such as making client-facing teams and relationship managers more efficient can make a 10% to 20% impact on operating profit, McKinsey said in an earlier study,

Global transaction banking generates almost $1.3t in annual revenue and makes up half of the wholesale banking revenue pool. But lower interest rates, geopolitical uncertainty, and intensifying competition are all expected to weigh on banks.

Customers are also ready to switch banks to those who could meet their expectations and provide a preferred user experience, McKinsey stated, based on an earlier study published in September 2025. Up to 20% do so each year for operational deposits, which have been viewed as stickier historically, according to McKinsey’s 2025 Corporate and Commercial Deposits survey.

“We expect to see more sharply defined outperformers and laggards around the world over the next few years; the best players will build client bases with deep, multiproduct relationships, and laggards will face declining margins as they compete on price,” McKinsey wrote.

Fintechs offer a range of innovative services that bank customers want, and banks partnering with them considerably reduces the time to market compared with relatively slow internal build efforts to develop something similar, the report stated.

AI is seen as a game changer that can improve efficiency and cost savings, according to a recent study by S&P Global Ratings. 

Standard Chartered, for example, has an “AI factory” that has reduced memo underwriting time from days to minutes in Hong Kong.