Reflections on the future of relationship management in correspondent banking

Abstract

The importance and the complexity of managing bank relationships within correspondent banking businesses has skyrocketed in conjunction with the global tectonic shifts and changes following first the banking and now the developed markets’ sovereign crises. This paper argues that business models are in need of restructuring in terms of understanding the importance of relationship management; the payment chain value creation, both in terms of what creates value in the payment chain and how that value is created; and, in particular, understanding the growing importance of relationships, partner-type alliances and knowledge transfers when banks evaluate their growth strategies, and hence make the ‘buy’ decisions. Likewise, product development opportunities should focus on efficiencies in processing and in information management. If the relationship management of banks is not changed, however, all such investment could be wasted.