Intermediate
2 Days

Course Delivery: Live Online

Course Objectives CPD Certified

The overall goal of this course is to provide participants with an understanding of the risks in providing Correspondent Banking services in the highly-regulated operating environment. Also, how these risks can be mitigated and therefore managed. The focus will be on combatting financial crime in the form of money laundering and terrorist financing via the adoption of industry best practice and the avoidance of higher-risk activity. Particular attention will be given to an examination of the key regulatory requirements and the importance of adhering to these, although other risks will be covered.

 
Key Learning Outcomes
  • What Correspondent Banking is and does; its history and relevance in today's world by facilitating international trade
  • Payments: via SWIFT, SEPA and Blockchain The current regulatory regime that seeks to deter financial crime; to include an examination of the USA Patriot Act, OFAC and FATF requirements               
  • The Wolfsberg Group and the determination of industry best practice for Correspondent Banking
  • The various types of counterparties involved in Correspondent Banking and the different risks they pose
  • Key Correspondent Banking products and their inherent risks
  • The infrastructure required to identify and manage the risks of Correspondent Banking

Who Should Attend

This course is suitable for those people who wish to understand the risk implications of the correspondent banking business which banks engage in and participants should have a basic understanding of correspondent banking products.
Day One
Overview

This opening section provides an insight into the history of Correspondent Banking, its inherent risks and why there is rigorous regulatory oversight.

  • Definition and overview of Correspondent Banking and its importance today
  • Risk identification
  • What constitutes financial crime, why it is particularly applicable to Correspondent Banking and what should be done to combat it
  • Society for World Wide Interbank Financial Telecommunication (SWIFT) payment system
  • Consider SEPA and Blockchain payment systems.
Regulatory Oversight

This section focuses on key pieces of global regulation which govern financial crime risk management and compliance and draws-out the importance of meeting global and local regulatory requirements.

  • The USA Patriot Act; the implications and requirements governing transactions in US Dollars or involving US citizens or entities
  • OFAC Sanctions; their purpose and implications
  • FATF Recommendation; including Wire Origination Rules and payments transparency
  • Wolfsberg Group; industry best practice guidance and recommendations
  • Lessons learned through failures to identify financial crime
Day Two
Types of Client and Accounts

This section covers the numerous types of client and account involved in Correspondent Banking and the risks which arise with each one.

  • 3rd party Correspondent Banks
  • Downstream/“Nested” Correspondent Banking
  • Anonymous Accounts
  • Affiliates and branches
  • Shell Banks
  • Money Service Bureaus
Products
This section focuses on the key products used in Correspondent Banking and the risks they pose.
  • Account services
  • Payments:
    • Making and receiving payments through your Correspondent Banking network
    • Identification of the types of risk which arise in the payments process including currency risk
  • Trade Finance products:
    • Documentary Collections
    • Letters of Credit
  • Foreign exchange
Risk Management

This section looks at the broad concepts of risk management designed to prevent financial crime.

  • Risk infrastructure and defining the bank’s appetite for risk within Correspondent Banking
  • Three Lines of Defense: concept and purpose
  • Compliance risk management: KYC plus global, international and local regulations and industry standards
  • Operational risk management: Screening and monitoring, suspicious activity
  • Continuous risk management: Ongoing due diligence