Correspondent banking in retreat, but growing in Asia
While financial inclusion is a top priority for emerging economies, new research suggests more stringent enforcement of anti-money regulations in recent years has resulted in major Western banks disconnecting from these regions, leaving local businesses without access to the international financial system. Correspondent banking relationships, where a financial institution provides services on behalf of another to facilitate cross-border payments, have declined globally by 25 percent since 2009 despite the fact that global GDP per capita grew during the same period, US-based financial services firm Accuity announced on May 8. It attributed the drop to large Western financial institutions “de-risking”, a practice in which financial institutions exit relationships with clients or markets perceived to be at high risk of money laundering or terrorist financing.
