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CARDS & PAYMENTS | Cesar Tordesillas, Malaysia

More Malaysian banks focus on transaction banking

More Malaysian banks are now enjoying thre benefits a sustainable fee-based income and a source of low-cost deposits from transaction banking.


Alliance Bank Malaysia Bhd head of SME banking Steve Miller agreed that banking institutions were focusing on transaction banking in view of the pre-provision profits.

“As customers would be opening current accounts to facilitate their transaction banking, the balances in the account become a good source of low-cost deposits,” he told Star Online.

Miller says the bulk of transaction banking fees are from trade, local and cross-border payments, collections and guarantees.

Miller explained that transaction banking helped businesses and retail customers to carry out their day-to-day payments, collections, trade and foreign payment activities.

OCBC Bank Bhd head of group transaction banking Chuang Boon Kheng said that transaction banking was a high-volume business.

“Transaction banking solutions are designed to help corporate customers manage and optimise their working capital, and current account forms the first layer of the relationship.

“Our product teams constantly build products and solutions to support the corporate working capital requirements. By securing a company’s operating account, we tend to secure a stable stream of income.
Transaction banking solutions are designed to help corporate customers manage and optimise their working capital, says Chuang

“As corporate customers advance on their corporate lifecycle’, they would require a different set of solutions and our established relationship with them allows us to anticipate and cross sell solutions that suit their requirements,” she said.

Meanwhile, Chuang said that within transaction banking products, trade finance had always been a key contributor to OCBC’s fee income.

“In fact, our cash management and trade finance are both award-winning services. Transaction banking will continue to be a core business as OCBC continues to grow with its customers,” she said.

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