In the past year or two, the pace of change has accelerated rapidly in the transaction banking industry. Disruption to business models is not far behind what we see taking place in retail banking, as competition increases, new market entrants move into traditional banking areas, such as FX and payments, and out-innovate their traditional banking partners.

Leading transaction banks are responding to the disruption by leveraging their expertise and technology to deliver the digital customer experience that corporates are demanding. Those already leveraging real-time payments, big data, file standardization and straight-through processing are in front of the line.

The biggest obstacle is finding room in the IT budget to move from "keep up" activities—those necessary for running the business—to "step up" initiatives, which drive transformation and growth. Transaction banks today also are burdened with legacy infrastructures, implementing complex regulatory changes across many jurisdictions, and protecting their customers from fraud and cybersecurity risks. All of these challenges impede their agility to "step up" to customer demands and compete with innovation from new players.

Many banks are trying to do several things at once:1) perform open heart surgery on their legacy infrastructures; 2) maintain or improve their return on equity; and 3) change their banking model. Trying to achieve all of this in parallel can result in change overload, especially in a flat budgetary environment.

Leading banks are looking ahead to the new world, recognizing that legacy modernization is no longer a market differentiator. They are exploring different models with their IT partners to relieve their legacy spend and allocate more of their IT investment to "stepping up."

Rather than focusing just on products, leading banks also are investing in service delivery innovation. Corporates, for example, are looking for full dashboards to help improve their decision-making. Banks that can deliver dashboards are quickly gaining an edge.

In addition to more service innovation, corporates want transaction banks to understand them as a whole and help them to fulfill their financial goals. There is great opportunity within the transaction banking industry to develop and use that kind of intelligence. Banks just need to implement the right strategy and systems to make it happen and to act now.

While global disruption in transaction banking is well underway, leading banks are taking charge with strategies to reduce their IT spend and invest in "step up" programs like digital transformation to enhance the customer experience, drive innovation and out-compete new entrants. The changes taking place are creating enormous opportunities for growth and success in the months and years ahead.