The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Treasury

Operational overhaul needed for correspondent banking recovery

Regulations intended to make the correspondent banking network safer have stifled the ability to operate, say bankers. Yet the need for the service continues and requires new ways of thinking.

Correspondent banking relationships are in decline. Between 2009 and 2016 they fell by 25%, according to research published earlier this year by compliance software company Accuity. That fall was all the more striking considering that the number of global bank locations increased by 20%.

Global firms want to work with local banks, but they fear the hefty cost of regulatory compliance. In 2014 alone, banks paid out $10 billion in fines relating to anti money-laundering (AML) regulation, according to the US Department of Treasury.

Banks feel their hands are tied, argues Etienne Bernard, global head of transaction banking at Crédit Agricole, with the burdens on them not fully understood by the authorities that impose them.

Etienne-Bernard-160x186

Etienne Bernard,
Crédit Agricole

“There needs to be greater transparency regarding some regulatory requirements banks are facing in transaction banking," he says. "There is a need to help to continue to be within these requirements so that a lack of understanding does not lead to [the banks] stopping doing business.”

Anand Pande, global product chair of trade and supply chain finance at banking platform provider Intellect and founder of The Growth Paradigm Partnership, says there has been a wariness of doing business with correspondent banks.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree