Our point of view

“By sticking with our local correspondent banking customers we can safeguard their access to the financial system, support our commercial footprint and build strong relationships with clients. We can protect and enhance financial inclusion around the world by working with local partners and bringing them into our risk framework.”

Heidi Toribio | Managing Director and Global Head, Banks and Broker Dealers

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“Correspondent banking goes to the heart of facilitating cross-border trade and financing growth, which is central to our DNA as a bank. We are determined to be trusted and set ourselves apart by both promoting the safety of the financial system and preventing financial exclusion. I am proud of the work we've done with the Correspondent Banking Academy to improve standards but we also know that we must constantly renew our approach to meet the evolving needs of our respondent banks, and disrupt the activities of criminals attempting to use the financial system to launder the proceeds of their illegal activities.”

Alex Manson | Global Head of Transaction Banking

Progress

De-risking through education

We have developed a unique strategy called ‘de-risking through education’ which aims to manage the financial crime risk in our correspondent banking portfolio, support growth in emerging markets and promote financial inclusion. As part of this initiative, we partner with our respondent banks who are looking to improve their financial crime controls, and share our tools and experience to help them build robust controls for managing financial crime risk.

This is done through a series of events called ‘Correspondent Banking Academies’, where we educate our clients on international best practices in financial crime compliance as well as giving clients access to the eLearning materials we use at Standard Chartered.

MENAP Correspondent Banking Academy

In February 2017, we brought together over 100 representatives from respondent banking clients, regulators and law enforcement across the Middle East for the latest in our series of Correspondent Banking Academies.

Halting the decline of correspondent banking

Correspondent banking has been a cornerstone of transaction banking for many years, facilitating cross-border flow of goods and services, and connecting banks and their customers from around the world, writes David Howes, Deputy Head, Group Financial Crime Compliance. However, as banks, regulators, policy makers and law enforcement agencies address the challenge of tackling money laundering and financing of terrorism, one outcome is that some banks are choosing to de-risk their business by exiting correspondent banking in certain markets, with very real implications for the global economy.

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Many people are devoting energy to promoting financial inclusion, yet today there is a growing awareness of the negative effects that de-risking by global banks can have on these efforts. Here are some recent reports and debates that bring this challenge, and opportunity, to life.

Our perspective on ‘Promoting financial inclusion with safe and secure correspondent banking’, in the Global Banking & Finance review
Chatham House research paper on ‘The Impact of Banking Restrictions on UK NGOs

RUSI researchers find that banks are seen to be restricting the work of humanitarian NGOs and “impeding the effectiveness of the UK government's aid budget” through de-risking activity.

Standard Chartered’s perspective on ‘Managing risk in emerging markets

Report offering companies currently conducting business in emerging markets, or seeking to do so, tips and advice.

IMF and World Bank event on ‘Financial Inclusion not Exclusion: Managing De-Risking

Fintech innovation and successes from emerging countries and the private sector show tangible progress toward Universal Financial Access 2020, but de-risking is undermining these efforts.

Standard Chartered’s perspective on ‘Promoting financial inclusion in correspondent banking

Anurag Bajaj, Global Head of Banks, Transaction Banking on efforts being made to ensure that correspondent banking remains a lifeline of commerce, facilitating and financing trade and cross border financial flows

Oxfam and the Global Centre on Cooperative Security on ‘Understanding bank de-risking and its effects on financial inclusion

Report based on a four-month exploratory study on the impacts of bank de-risking practices on financial inclusion, carried out between November 2014 and February 2015.

How we’re fighting financial crime