The Role of Correspondent Relations in the System of Cross-Border Payments in the Context of Digitalization

Abstract

The current state of the network of banking correspondent relations serving a significant part of cross-border payments and international transactions is of concern to specialists and international organizations. The relevance of the tasks of improving the efficiency of cross-border settlements through correspondent banks determined the choice of the subject and the purpose of the study. The subject of the study is correspondent banking relations in the system of cross — border payments. The purpose of the work is to identify trends in the development of banking correspondent relations in the modern system of global payments, which is being transformed under the influence of digital technologies. The article analyzes the state and development trends of the global network of correspondent banks. As a result of the conducted research, it is concluded that correspondent relations are gradually losing their leading role in national jurisdictions due to the digitalization of national payment systems. However, they are still used in cross-border payments, ensuring the interconnection of payment systems of various levels and multilateral platforms. Digitalization of national and international settlement systems leads to the spread of alternative models of their implementation and the reduction by banks of networks of foreign correspondents to increase the efficiency of the use of funds and reduce costs and risks. However, the gradual degradation of the global system of correspondent banking relations is becoming a serious problem, fraught with an increase in the cost of cross-border payments, a decrease in the availability of settlement and payment financial services for participants in international economic relations, and in the context of increasing sanctions pressure on correspondent banks — fragmentation of the existing global system of cross — border payments.