Transaction Banking

Transaction Banking

Updated September 14, 2021

Written by the WikiJob Team

Transaction banking, sometimes referred to as 'transactional banking' refers to the movement (the 'transaction') of money from one place to the other – and as such, plays a vital role in the functioning of any bank or business.

Those in the transaction banking sector will work on a large variety of projects such as domestic/international trade and cash flow management.

They may also assist security services to improve relationships between banks, partners and customers alike.

Transaction Banking
Transaction Banking

What is transaction banking?

Key Roles in a Transaction Banking Department

In recent years, transaction banking has become vastly more popular as a career and industry. In the past, a transaction banking career was often (incorrectly) considered both less exciting and less profitable than other banking careers like investment banking.

Below are some of the key roles and duties often taken on by an employee in a transaction career, and the kind of work they entail:

  • Cash management. A transaction banker will often work to help businesses find the most efficient way to manage their cash flow, offering solutions when problems may arise. They will be aware of and often able to predict macro-trends and changes in the market, and will use this knowledge to inform their decisions.

  • International trade. Transaction bankers often work internationally as well as nationally and, as a result, must be aware of international trading laws and regulations, and ensure that each party abides by them.

  • Security. Transaction bankers need to apply a range of security protocols to any given situation. They must also be able to take adequate steps when these protocols are not met. Protection of assets is vital in any transaction, and transaction bankers will operate with this in mind.

What Transaction Bankers Do

Transaction bankers tend to work in all three fields (security, cash handling or international trade), although some will specialise or expand into other areas of banking.

Banking is a highly competitive sector – working hours can sometimes be long and rather stressful. However, transaction banking is not considered to be as strenuous as investment banking (which sees bankers working 80+ hours a week).

Although some bankers will undertake solo projects, there are usually plenty of opportunities to share the workload between members of your team.

A typical working day for a transaction banker might include the following:

  • A business meeting with clients
  • A company meeting
  • Reading over plans or documents
  • Team liaison
  • Discussions about new products or projects
  • Development meetings

Salary and Career Development

Transaction banking managers typically earn a competitive salary of around £45,000 per annum, which, while modest in comparison to other areas of banking, compares well to the average UK salary (around £29,000).

Though a transaction banking salary will not always be as profitable from the start, it is not too hard to move up the ladder and begin earning large figures.

Transaction banking develops a range of highly transferable skills which, when developed correctly, will allow bankers to work in many different fields both nationally and internationally.

Transaction Banking
Transaction Banking

Getting into Transaction Banking

Finding a way into transaction banking need not be difficult, though it does involve some rigorous training and tenacity.

Most people working within the banking industry will have graduated university with a BSC or BA, typically in a subject such as a business, finance, marketing or economics.

There are also several excellent graduate or internship programmes that offer full training to those seeking a career in the industry.

Below are some of the key skills or attributes required from those who wish to enter the industry:

  • Industry awareness. A transaction banker must be well informed about banking practices, rules, regulations and systems. The best way to achieve this is by keeping up-to-date with academic papers and news articles, perhaps by setting up a Google alert or following trends on social media.

  • Highly skilled in maths and a practical thinker. Anyone seeking to work in the banking industry should be numerically proficient and able to think on their feet – things can change quickly and it is important to adapt to any situation without fuss.

  • Determined and proactive. Banking is a difficult industry to establish yourself within, so having clear career goals to work towards is key. You must also be able to make difficult decisions in a relatively short time. Transaction bankers are able to take on a lot of responsibility with ease – often working with exceedingly large amounts of money.

  • A 'people person'. Banking does not happen entirely behind a computer screen or a spreadsheet; an excellent transaction banker will be able to communicate freely and easily with all clientele, especially as many will work with international clients. A confident and relaxed persona is thereby essential.

  • A team player. As mentioned previously, transaction banking often requires a group of people to work towards a shared goal or target, often over a long period of time. Your communication, responsibility and time management skills will be important. 

Final Thoughts

Transaction banking offers a highly diverse career that allows for participation in large-scale global projects as well as work closer to home.

Above all, it offers a generous salary with plenty of opportunities for personal and career growth over time.

In today's market, transaction banking is a safer career option than investment banking, and is beginning to prove itself to be an exciting and prosperous career.

As the global market changes, transaction banking will continue to prove itself to be a vital part of the functioning of any bank or business and, as such, is the perfect place for a recent graduate to begin their career.

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