Accuity: De-risking and the demise of correspondent banking - How did we get here and what role does regtech play in promoting financial inclusion?
Correspondent banking has seen many challenges over the years. While the number of banks worldwide has grown, the number of correspondent banking relationships have declined. Various factors have been attributed to this phenomenon, driven mainly by the increasing costs of compliance. The impact has been significant, with unintended economic and social consequences on both the respondent bank and the countries affected by this withdrawal.
However, there are still opportunities for banks that can manage their KYC and compliance processes more cost effectively. So how can regtech help reverse the derisking trend? And how can banks begin to re-risk?