Perspectives | Fighting financial crime

Industry

Correspondent Banking

Meeting the dual challenge of keeping the global economy safe and inclusive

Anurag Bajaj | Global Head, Banks, Correspondent Banking, and Regional Head, Transaction Banking Americas, Standard Chartered

August 2017

In February, we hosted one of Standard Chartered’s Regional Correspondent Banking Academies in Dubai, where we took forward the work we are doing with banks across the region to protect the financial system from perpetrators of financial crime.

“By sharing best practices around anti-money laundering, customer due diligence and suspicious transactions typologies, our aim has been to help raise industry standards and empower banks to act effectively against money laundering and terrorist financing.”

Continue readingHide

We call our approach ‘de-risking through education’, and have created a short video to give a flavour of the conversations that take place with banks, regulators and law enforcement at these events.

This really matters. Firstly, on a personal note – we all aspire to build and run a “clean” business that promotes legitimate cross border trade and commerce – the engines of global growth. Secondly, we want to do our best to avoid freezing banks out of formal correspondent banking networks as this makes fund flows less transparent by driving them underground.

We have seen research highlighting that global correspondent banking relationships have fallen by 25% since 2009.

This means that, increasingly, large parts of the world risk being shut out of the international financial system, making it harder to drive trade and support economic growth. Both the IMF and the Financial Stability Board have identified this trend as an area of concern.

There is a live debate about how the financial system can help reverse the decline in correspondent banking. New technologies have an important role to play, as developments in data sharing and analysis will make it easier to spot suspicious transactions. This can be supported by forging new public-private partnerships, with banks and regulators working together to better identify and disrupt financial crime – and Standard Chartered is proud to be leading the way in this area. There are also voices looking at the rules surrounding the financial system, with the IMF suggesting that “changes in the regulatory and enforcement landscape” have made it harder for some banks to stay in certain markets.

“At Standard Chartered, we believe that maintaining the security of the financial system need not come at the cost of financial exclusion. Where possible, we are committed to building the capabilities and practices of the local respondent banks we work with.”

The Correspondent Banking Academy has been central to that effort, reaching more than 600 banks in over 40 markets. We aspire to lead the way in fighting financial crime and remain committed to the journey ahead.