Recent years have seen a series of scandals in the transaction banking industry, with several groups falling foul of AML regulation, sanction busting and other systemic failures.
Regulators are now responding to these failures, requiring banks to perform third party oversight of their cash correspondent agents, to assess and manage risks associated with these types of relationships. Network Management departments have tried to implement monitoring programmes but have generally struggled to do so successfully. Consequently monitoring and due diligence on cash correspondent providers is much less developed than on their securities counterparts.
In our latest webcast, Jim Micklethwaite, Head of Operations, leads a 15-minute discussion about cash correspondents: why banks are now required to monitor them, where the risks really are, how our new monitoring programme can help banks monitor and benchmark their correspondents, and what we have learnt so far.
Watch until the end for a set of unique insights into the Cash Correspondent Monitoring space, including that:
18% of the cash correspondents do not segregate and identify client cash that is invested into short-term money market instruments; and,
16% of banks have not confirmed that their cash business is subject to external audit validation, compared to just 2.5% of sub-custodians who have not confirmed that their business is externally audited.
We hope you enjoy the webcast.