How to drive profitability in transaction banking

In a shifting macroeconomic landscape defined by tighter spreads, real-time liquidity demands, and mounting regulatory pressures, transaction banks are under growing pressure to do more with less. At a high-level roundtable hosted by BAFT and Trade Treasury Payments (TTP) during the BAFT Global Councils Forum in Frankfurt, senior banking leaders explored practical pathways to sustainable profitability. The discussion unpacked strategies to manage risk-weighted assets (RWAs), unlock balance sheet efficiency, and enhance return on capital employed (ROCE). From synthetic securitisations to cross-selling trade, cash, and FX, the paper surfaces how banks are adapting to capital constraints while expanding into new client segments and markets. The roundtable also highlighted how technology is rewriting the correspondent banking model, introducing tokenisation, 24/7 liquidity tools, and real-time payments infrastructure, and how collaboration with fintechs may unlock the next wave of growth. With margin compression, regulatory headwinds, and fintech disruption forming a “perfect storm,” this whitepaper offers timely insight into how leading transaction banks are repositioning for the decade ahead.