(1 August 2025) Regional players have upped their game when it comes to transaction banking products and services. Corporates are also rethinking their banking mix to access local expertise in uncertain times.
TreasuryToday reports that the impressive growth in Asia’s corporate segment – an estimated 30 percent of the world’s 500 largest corporations will be based in the region by 2030 – has fuelled regional transaction banks’ ambitions. They are also aiming to fill the void left by the scaling back of global players’ operations in certain markets and customer segments, a strategy some refer to as “shrinking to greatness”.
Transaction banking, including cash and liquidity management and trade finance, is both a “sticky” – meaning that corporates usually stay with their existing providers for a long time – and highly profitable business. It is the core growth engine for corporate and investment banking (CIB) operations in Asia.
In the context of trade wars and heightened geopolitical instability, supply chain disruption and currency volatility, as well as the ongoing challenges associated with operating in diverse countries with strict regulations, banks that can provide an on-the-ground perspective are being received positively, according to Martin Smith, East & Partners Global Head of Markets Analysis.
“Instead of a one-size-fits-all approach, treasurers and chief financial officers (CFOs) are expecting a specialised service offering from their banks, with more focus on a local look and feel,” he says. “Corporates are looking to their banks to proactively address their risk management needs, which can give the regional transaction banks an edge, as they have a more focused product and service proposition. In requests for proposals, the top selection factors are coverage, capabilities and network, but credit commitments and industry knowledge help regional banks stand out when corporates are looking for a new transaction banking provider” Smith commented.
Regional banks have a deep understanding of local markets, regulations and business culture, which allows them to serve a broader spectrum of clients with customised solutions that align closely with their needs and the local environment. In addition, regional transaction banks’ expansion is supported by their strong networks, according to Malaysia headquartered Maybank Managing Director of Transaction Banking and Payments, Arvind Prasad.
Echoing Smith’s point, Prasad reports that global clients increasingly value local insights and agility, as they seek alternative markets for growth amid rising geoeconomic fragmentation. For example, he sees a growing international interest within the Association of Southeast Asian Nations (ASEAN), particularly in the context of ASEAN-Gulf-China partnerships.
“This is an emerging trend we are watching closely, as we have a track record of bringing in clients from the Gulf and China into ASEAN” says Prasad, adding that Maybank has a presence in all ten key ASEAN markets.
The transaction banking business is one that necessitates a long lead time, often taking five to ten years to build deep and trusting relationships. Additionally, it has been challenging for regional banks to win the entirety of clients’ wallets away from their primary provider. According to East & Partners long running Asia Cash & Payments service based on direct interviews with the Top 100 revenue ranked corporates in each of ten markets (N: 1000), the regionals have had more success as secondary providers for one-off or infrequent cash management or cross-border payments needs.
“It takes a long time to get a foot in the door as a secondary provider and then to become a primary provider. It also requires a lot of resources to get the proposition across and win market share as reflected in ANZ’s performance, which has had a strong focus on its regional offering for years, carving out a small piece of the market at a significant cost,” says Smith.
And the competition is intense among regional banks and global majors. Reflecting the higher level of panel banking taking place for transaction banking in Asia, competitive pitching levels are much higher relative to the global average. According to East & Partners research, CFOs and corporate treasurers in China, Hong Kong and Singapore receive up to seven approaches for their transaction banking business each year compared to the global average of just over five approaches.
However, as Smith mentioned, the high customer churn figures presents an opportunity for regional players and the competition doesn’t come down to just price. Prasad agrees. “Corporate clients have often focused on pricing, but increasingly it is about what value we can offer: support, ease of doing business and advisory services,” he says.
Interestingly, recent research by East & Partners found that the majority of treasury respondents said that a recommendation by a trusted friend/colleague/supplier/trading partner is the main prompt that would encourage them to engage with or respond to a new bank.
“Knowing the experience a close business colleague has had with a bank gives us much more confidence in opening a discussion with a potential new provider,” the treasurer at a Singapore logistics group told East & Partners.