Banks transform transaction banking into digital platform driven by real-time payments and cloud-native architecture

Major banks are reshaping transaction banking from a low-margin utility into a strategic, software-like platform through investments in payments infrastructure, real-time liquidity management, and cloud-native architectures, signalling a significant industry shift.

The recent round of 2025 full‑year earnings calls from major banks has recast transaction banking from a low‑margin utility into a strategic platform at the heart of corporate finance, according to report...

ing by PYMNTS. Executives at Citigroup, JPMorgan Chase, Bank of America, BNY Mellon and others repeatedly tied revenue gains not merely to cyclical or rate factors but to multiyear investments in payments infrastructure, liquidity visibility and cross‑border settlement that are now delivering scale and operating leverage.

For decades treasury, custody and settlement systems were built for batch processing and end‑of‑day reconciliation. That model became a constraint as supply chains digitised and capital moved faster. Banks told investors that the answer has been to re‑architect legacy stacks with cloud‑native cores, API‑first integration layers and event‑driven architectures so balances and payments update continuously rather than periodically. The result, they said, is near‑real‑time treasury management and a single view of cash across accounts, currencies and geographies , capabilities that convert traditional service lines into platform businesses.

Citigroup reported that its Services business generated approximately $21 billion in revenue for fiscal 2025, up 8% year over year, and said its Treasury and Trade Solutions processed millions of payments daily across more than 90 countries while playing a central role in U.S. dollar clearing. Citi executives explained that more than 80% of their transformation programmes are now at or near target, with hundreds of legacy applications retired , a conclusion echoed in Citigroup’s quarterly disclosures showing widescale application rationalisation and integration of tokenised USD clearing for real‑time cross‑border flows. According to Citigroup’s disclosures, those moves have lowered marginal costs in high‑volume businesses such as TTS.

JPMorgan Chase’s management likewise pointed to structural change. Commercial banking payments revenue rose 9% year on year to $5.1 billion in the fourth quarter, and Securities Services revenue increased 13% to $1.5 billion, the bank said. CEO Jamie Dimon told investors on the earnings call that the firm has been “quite involved in the whole blockchain technology space for some time” and is applying tokenisation and digital infrastructure across its operations.

Bank of America highlighted a 13% year‑on‑year increase in global treasury service charges and said its CashPro platform accounted for $336 billion in corporate payments, up 18%. BNY Mellon reported modest growth in Payments and Trade and a 9% rise in securities services revenue to $9.7 billion, and CEO Robin Vince said on BNY’s earnings call that the bank is focused on “building trusted market infrastructure for the long term and serving our clients in new and evolving ways, including increasing delivery of new capabilities connecting the traditional and digital asset worlds.”

Those operator accounts point to a broader shift: transaction banking is behaving more like a software platform. Industry executives described rising revenues without commensurate increases in staffing or processing costs as automated analytics, reconciliation and controls reduce manual exception handling. For corporate clients, that translates into faster liquidity management, improved cash intelligence and embedded treasury tools once reserved for large corporates but now accessible to small and medium firms through APIs and embedded finance, a trend analysed in PYMNTS’ reporting on banks’ move from branch services to back‑office solutions.

Not every institution posted outsized gains. Wells Fargo disclosed only modest growth in Treasury Management and Payments, underscoring that results vary with scale, legacy complexity and the pace of modernisation. At the same time, industry data paint a mixed macro picture: Federal Reserve Bank of New York quarterly trends for 2025 show the large banking organisations remain sizeable and profitable, but external analyst research has trimmed expectations for investment banking revenues, citing anticipated softness in underwriting and advisory fees despite year‑to‑date aggregate increases. Financial technology briefings for the period also highlight diverging enterprise performance and margins across the sector, reflecting differing exposures to markets, balance‑sheet management and technology investments.

Taken together, these disclosures suggest an inflection point. Banks that have completed large parts of their back‑end modernisation report improving operating leverage in transaction businesses; they are monetising cash management and payments through platform‑style propositions and new product sets that bridge traditional banking with tokenised and digital asset rails. Yet analysts caution that parts of the industry still face pressure from slower capital markets activity and the residual cost of transformation.

The earnings season therefore framed transaction banking as both a defensive necessity and a growth engine: defensive in reducing operational risk and cost, growth‑oriented in enabling banks to sell treasury intelligence, realtime liquidity services and embedded finance capabilities to a wider base of corporate clients. As banks continue to retire legacy applications and stitch together APIs, the business will be watched for whether the software‑like economics executives describe can be sustained across the industry and through the next cycle of revenue volatility.

Source: Noah Wire Services