Next-Gen Transaction Banking: Unlocking Working Capital with AI and Embedded Finance

The New Era of Transaction Banking

Transaction banking is undergoing a profound transformation. As corporates face mounting pressures on liquidity, efficiency, and growth, the ability to unlock working capital has become a strategic imperative. The convergence of artificial intelligence (AI), generative AI, and embedded finance is reshaping how banks and their clients manage cash, optimize working capital, and create new value streams. For banks, this is not just about keeping pace with digital-first challengers—it’s about redefining the very foundations of client relationships and revenue generation.

The Challenge: Legacy Technology and Rising Expectations

Despite the critical role of transaction banking, many institutions remain hampered by legacy technology, fragmented data, and siloed product systems. These constraints limit agility, slow innovation, and make it difficult to deliver the seamless, real-time experiences that corporates now expect. The stakes are high:

51% of banks cite fragmented and siloed technology as the primary impediment to growth.
40% struggle with scalability limitations in existing systems.
Corporates maintain an average of 6-10 bank relationships, with some managing over 20, and 62% seek a single, real-time view of their company’s bank balances.
65% highlight onboarding and KYC processes as the biggest challenges.

Meanwhile, fintechs are raising the bar, leveraging AI and data analytics to deliver tailored, embedded solutions that are faster, more transparent, and more efficient. Venture capital investment in B2B transaction banking fintechs is surging, with embedded payments, insights-as-a-service, and AI-powered treasury management systems leading the way.

The Opportunity: AI and Embedded Finance as Game Changers

Banks that embrace next-generation technology are positioned to lead. The integration of AI and generative AI into transaction banking platforms enables:

Real-time, 360-degree liquidity insights across all banking relationships.
Automated, no-code dashboards that empower clients to build custom working capital views and forecasts—without IT intervention.
Embedded finance capabilities that bring banking directly into clients’ ERP and treasury systems, eliminating friction and manual processes.
Proactive, AI-driven recommendations for optimizing cash positions, accessing pre-approved credit, and managing risk.

Case Examples: Innovation in Action

Barclays offers a plug-and-play ERP adaptor, digital receivables finance with automated credit assessment, and real-time data integration through fintech partnerships.
Citibank has launched embedded payments and direct API integration with client treasury workstations, streamlining payment and reconciliation activities.
NatWest provides a multi-bank connectivity cloud solution, integrating with clients’ TMS and ERP via APIs for seamless payment and reconciliation.

These leaders are demonstrating how AI and embedded finance can transform the client experience, accelerate onboarding, and unlock new revenue streams.

The No-Code, AI-Powered Dashboard: A New Standard for Working Capital Management

Imagine a world where a corporate treasurer can, in minutes, create a personalized, AI-powered dashboard that aggregates data from multiple banks and ERPs, provides real-time working capital positions, and delivers 30-60-90 day liquidity forecasts—all embedded directly within their ERP system. This is no longer a vision for the future; it is rapidly becoming reality.

Key features include:

Gen AI chat interfaces that guide users through dashboard creation and data integration, eliminating the need for coding or engineering resources.
Automated API connections to banks and ERPs, enabling instant, secure data aggregation.
Custom data visualizations and smart notifications, surfacing actionable insights and pre-approved financing offers.
Proactive AI alerts for anticipated cash shortfalls, with one-click access to tailored working capital solutions.

The result: faster, smarter decisions, reduced operational burden, and a step-change in client satisfaction and loyalty.

Embedded Finance: ERP as the New Digital Bank

The future of transaction banking is embedded. As open banking and API standards mature, banks can deliver their services directly within the platforms where clients run their businesses. For corporates, this means:

Seamless, invisible banking—no more toggling between portals or manual reconciliations.
Instant access to liquidity and credit, with AI-driven underwriting and same-day disbursement.
A single, unified view of working capital, regardless of the number of banking relationships.

For banks, embedded finance is a powerful lever for growth:

New revenue streams from AI-as-a-Service and platform licensing.
Scalable distribution through partner ecosystems and ERP integrations.
Deeper client engagement and higher cross-sell/upsell rates, driven by data-driven personalization.

Overcoming Barriers: The Path to Scalable, AI-First Solutions

Transitioning to this next-gen model is not without challenges. Banks must address:

Legacy technology and data quality issues that hinder integration and AI adoption.
Organizational silos that slow decision-making and innovation.
Security, compliance, and responsible AI concerns, ensuring transparency, fairness, and regulatory alignment.

The solution lies in a holistic approach:

Coreless, cloud-native architectures that decouple data and business logic from legacy systems, enabling rapid integration and modular innovation.
No-code, self-service tools that empower both clients and bank teams to build, iterate, and scale solutions quickly.
Cross-functional, agile teams aligned to client outcomes, not product silos.
Robust data governance and AI ethics frameworks to ensure trust and compliance.

Publicis Sapient: Your Partner for Next-Gen Transaction Banking

Publicis Sapient is uniquely positioned to help banks make this leap. Our expertise spans:

Strategy and consulting to define the vision, value chain, and business case for AI-powered, embedded finance.
Product and experience design to create intuitive, client-centric journeys and no-code tools.
Engineering and data to build scalable, secure, and compliant platforms that integrate seamlessly with client systems.
AI and analytics to unlock actionable insights, automate decisioning, and drive continuous innovation.

We have delivered:

A BaaS-first commercial SME bank, fully functional in 9 months, orchestrating 22 fintechs and enabling real-time, API-driven ERP integration.
Strategic joint ventures with leading banks to create platform businesses that combine banking and non-banking services, reaching millions of customers.
AI-powered dashboards and embedded finance solutions that reduce onboarding times from weeks to minutes, increase cross-sell rates, and deliver measurable revenue and cost benefits.

The Road Ahead: From Vision to Value

The transformation of transaction banking and working capital management is well underway. Banks that act now—modernizing their technology, embracing AI and embedded finance, and reorienting around client needs—will not only defend their market share but unlock new growth and relevance in a rapidly evolving landscape.

Ready to build the future of transaction banking?

Publicis Sapient stands ready to partner with you—combining deep industry expertise, proven frameworks, and cutting-edge technology to deliver scalable, AI-powered solutions that drive new revenue streams and lasting client value.

To learn more about how Publicis Sapient can help your bank unlock working capital and lead in the era of AI and embedded finance, visit publicissapient.com/fs.