Your opinion matters to us. We invite you to a quick catch-up about the event feedback.
Schedule a MeetingOur webinar, moderated by Francesco Miccoli, Senior Advisor at Elucidate, and featuring insightful discussions from industry experts: Alex Silver, Managing Director at Stern International Bank, Elitza Kavrakova, Head of Institutional Clients East at Raiffeisen Bank International, and Vasilina Sumer, Head of Correspondent and IFI at Moldindconbank, provided practical insights into the challenges faced by respondent banks, correspondents and the practitioners themselves.
The alignment between respondent and correspondent bank is not always easy – in fact, it tends to be challenging for both parties.
We are grateful for our participants for coming together to discuss where these challenges lay.
At our webinar, we brought both – respondent and correspondent perspectives to discuss the current market situation, their views on challenges dependent on predictable and unpredictable factors, as well as a common understanding of how, together, we can create better relationships and cooperate more effectively.
Our panellists, and viewers, highlighted the impact of geopolitical dynamics on the day to day operations in correspondent banking.
Bringing in the view from a respondent bank, Vasilina assured that there is pervasive pressure on respondent banks across emerging markets, emphasising the need for a nuanced understanding of the geopolitical landscape. Even in a region with comparably calm geopolitical pressures, like the LATAM region in which Alex Silver and Stern Bank operate, the geopolitical shifts can occur overnight.
While all participants and viewers agreed that the geo-political challenges have an over sized impact on correspondent banking as a business model, the more contentious
debate centred around how financial institutions should respond to them.
Speaking from his experience leading the correspondent banking business of one of the
largest correspondents globally, Francesco expressed concerns about the ability of smaller banks to access international markets directly.
Alex Silver added that understanding and aligning to the risk appetites of your correspondent is key to maintaining the access needed. This exchange hinted at the reasoning behind the downsizing in correspondent banking that we have seen in the last 20 years.
On the other hand, Vasilina Sumer highlighted that de-risking could not be the solution. She expressed that the key to ensuring a better quality of transactions and better
correspondent relationships is to understand the requirements that need to be met.
Elitza Kavrakova agreed and brought attention to the importance of providing a clear strategic direction for respondent banks navigating the evolving correspondent banking landscape. She emphasised the need for specialisation and a deep understanding of
risk appetites to ensure mutually beneficial relationships between correspondent and respondent banks. Elitza stressed the need for external tools like Elucidate’s ratings for
their role in mapping risks and providing assessments to help respondent banks align with correspondent expectations effectively. Elitza Kavrakova: “We created an objectivised scoring model, which gives us a very good basis to decide what quality we would like to take in terms of correspondent relationships.”
The debate concluded with speculations on the future of cross-border payments.
Alex Silver discussed potential changes, stating, “Crypto digitalisation and attempts to implement those solutions will increase.” Elitza foresaw a trend towards localisation: “In the short term, I see localisation of correspondent banking, trying to do a lot in local currencies.”
The webinar shed light on how geopolitical challenges, emerging risks, and strategic considerations affect the decision making of executives in the correspondent banking business. It also presented a compelling case for the adoption of a unified risk scoring model to elevate the efficiency and effectiveness of risk management practices in the global financial landscape.