Correspondent banking has played a central role in the global payments system for ages. Yet, the traditional correspondent model has been ailing for the past 20+ years.
Any business participating in international commerce normally needs to make payments in foreign currencies to suppliers/sellers overseas for goods and/or services sourced from other countries.
This article focuses on correspondent banking, its role in international trade, and shortfalls of the traditional model that adversely affect lower-income countries, impeding economic development and the advancement of financial inclusion.