Cash management: it's a new ballgame. (Marketing News).

The good news, says Deloitte Consulting, is that there's still money in traditional cash-management business.

The bad news is that there isn't much money in it, and there's even less new money. The global payments business is expected to grow about 7 percent a year through 2008, says Deloitte partner Colin Klipin, but revenues are expected to remain essentially constant--which means that, in real terms, prices will actually decrease about 5-7 percent per year.

Klipin says that kind of money does not amount to a sustainable financial model for banks. "Banks have to re-think how they do this business." He recommends a complete strategic re-evaluation. Noncore functions that could be handled more quickly and at less expense by a third party should be outsourced.

Klipin recommends developing and implementing the tools you need to determine customer profitability. Go after extraordinarily aggressive cost-reduction initiatives. Look for higher margin opportunities in new customer segments or geographic areas.

And take a "venture capital" approach to investing in new products, markets and geographic areas, he says.