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Transaction Banking as a Driver of Relationship Banking: A Quiet Revolution

Transaction Banking as a Driver of Relationship Banking: A Quiet Revolution

  • Glória Baltazar • Head of Transactional Banking at Absa Bank Moçambique

When it comes to banking services, a common cliché we hear is: “the products are the same” or “they all offer the same thing”. After all, do banks offer the same products and services? A closer look at the structure and evolution of the banking sector reveals a very different picture.

If in the past, when banking was less sophisticated and less competitive, this statement might have had some truth to it, today it is far from being the case.

As banks evolve, so do their services and the way they interact with their customers. Driven by technological innovations and digital transformations, banks have expanded their portfolios. As well as offering traditional financial products, they are also incorporating a variety of non-banking services, making the offer more appealing and adapted to customers’ needs and lifestyles.

The decision to choose a bank goes beyond simply selecting products and services. It involves a series of considerations, from the quality of customer service to the ease of use of services, through to product offerings, personalised services and the integration of services (banking and non-banking). Customers are increasingly looking for a complete and integrated banking experience that is tailored to their individual needs and lifestyles.

Traditional banking, characterised by business models based on physical branches and their operations, has been the industry standard for decades. In this approach, banking services tended to be uniform and highly standardised, focused on deposits, credits and some ancillary services, with little differentiation between institutions.

However, the arrival of transactional banking, driven by technological and digital innovations, marked the beginning of a significant revolution in the banking sector. In contrast to traditional banking, transactional banking uses electronic and digital channels to provide access to a variety of financial services, allowing customers to carry out their transactions quickly and conveniently, anytime and anywhere.

In this era of transactional banking, banks are looking to differentiate themselves through the financial products they offer, but also through the overall experience they provide their customers. To this end, they have increasingly focused on providing an integrated experience that combines banking services with other value-added services.

For example, many offer links to everyday services, such as tax payments, on their digital channels. These additional offers make the banking experience more appealing and convenient, leading customers to choose certain banks over others.

With transactional banking’s commitment to improving the customer experience through value-added services, it has certainly transformed the way banks operate. However, the real driving force behind this revolution has not only been the adoption of new technologies by banks, but also the interaction with innovative companies that are at the forefront of financial technology.

These companies, called fintechs, which specialise in applying technology to improve financial services, have become increasingly influential in the way transactional banking is implemented and in defining what banking will be like in the future. Fintechs, for example, have become strategic partners in this banking revolution, contributing to the transformation of transactional banking into relational banking.

These companies are introducing new ways of interacting with banking services, from mobile payments to the use of artificial intelligence for investment advice. These disruptive innovations are forcing banks to adapt and evolve, creating greater convenience and a better customer experience.

By partnering with fintechs, banks are able to remain relevant and competitive in the digital age, improving the quality and variety of their services. These partnerships allow banks to improve their product and service offering and respond quickly to customer needs, which has become fundamental to customer satisfaction and being at the forefront of technological innovation in the sector in which they operate.

These partners specialising in the application of technology play a crucial role in shaping contemporary banking and highlight the importance of collaboration in driving progress in the banking sector. Their influence illustrates the power of innovation and technology in creating a more agile, efficient and customer-centred banking industry.

Relationship banking, in this context, represents the next phase in the evolution of the banking sector. In this “new” paradigm, banks are not just providers of financial services, but are also partners who achieve a deep understanding of their customers’ needs and expectations.

Today’s customers are looking for a distinctive added value that responds to their unique needs and preferences. Here, the quality of service takes centre stage. Customers value an efficient and empathetic service that is available when they need it and is able to solve their problems quickly and effectively.

Ease of use of banking services is also an important consideration. Customers expect the operations they carry out to be simple, intuitive and convenient. This includes everything from opening an account to carrying out daily transactions, bank transfers or payments. Banks that offer user-friendly and secure digital platforms have a competitive advantage, as they provide customers with the convenience of carrying out banking transactions anytime, anywhere.

Key points of a Silent Revolution

In short, offering personalised products and services has become a determining factor when choosing a bank. Customers expect their individual financial needs to be understood. They expect to be offered products and services that meet those needs, from personalised account packages or investment products adapted to their risk profile.

In addition, the integration of banking and non-banking services is becoming increasingly important. Customers appreciate the convenience of being able to access a range of services, both financial and non-financial, in one place, from taking out insurance to financial advisory services.

Thus, in this era of relational banking, banks that take on the role of trusted partners for their customers are thriving. These banks realise that the key to success lies not only in offering financial products, but also in the ability to understand and adapt to changing needs and expectations.

The Role of Artificial Intelligence

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To achieve this in-depth understanding of customers, banks are using technology and data in innovative ways. Artificial intelligence, for example, is used to analyse customer data, allowing banks to identify patterns of behaviour, better understand their needs and predict future trends.

With this information, banks can personalise their offer, providing products and services that exactly match individual needs.

This personalisation also extends to the banking experience itself. With the use of user-friendly interface technologies and easy-to-use digital platforms, banks can provide a functional and enjoyable banking experience – from the way customers interact with their bank online or via mobile applications, to the way they carry out transactions or access financial services.

A Fascinating Process

In essence, what today’s customers value is a complete and integrated banking experience that is tailored to their individual needs and lifestyles. They expect their banks to be more than just financial service providers, but partners who help them manage their finances and achieve their financial goals.

To summarise, we can see that the evolution of the banking sector has been a continuous and fascinating process, from traditional banking to transactional banking, and now the era of relational banking.

In this era of relational banking, success is not only measured by the quality of the financial products offered, but also by one’s ability to understand and meet changing needs.

Through the use of technology and data, banks can offer a personalised, intuitive and easily accessible banking experience that not only meets customers’ financial needs, but also integrates seamlessly into their lives.

Banks that manage to navigate this successfully are well placed to stand out in a highly competitive and constantly evolving sector. As we move into the future, the ability to innovate and adapt to change will be crucial to success in the world of banking. And at the forefront of this journey will undoubtedly be relationship banking – a central pillar of this new era.

By establishing partnerships with technology companies, banks can remain relevant and competitive in the digital age, improving the quality of their services.

a d v e r t i s e m e n t


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