Financial Stability Board Action Plan on Access to Banking Services by Remittance Providers

The Financial Stability Board has published two reports relating to its actions to address the decline in correspondent banking. The first report is a progress report addressed to the G20 Finance Ministers and Central Bank Governors on the FSB's four-point action plan to assess and address the decline in correspondent banking relationships. It sets out the actions taken since the FSB's July 2017 progress report and describes the work that remains to be completed at international level and implemented at national level by regulators and banks. That work includes:

• Implementing the recommendations and action plan on access to banking services by remittance providers (set out in the second report which is described below);
• National implementation of the new Financial Action Task Force and revised Basel Committee guidance on correspondent banking, which the FSB thinks can mostly be achieved by national regulators issuing statements to clarify their expectations so that they are reflected in supervisory practices as well as banks' risk management practices;
• Improving efficiencies in and enhancing standardization of Know Your Customer utilities, including encouraging the use of the Wolfsberg Correspondent Banking Due Diligence Questionnaire; and
• Progressing the enhancement and further development of solutions to capture the trade finance components of correspondent banking.

The second report is a stocktake of remittance service providers' access to banking services. The decrease in correspondent banking relationships has impacted the ability of remittance service providers to access banking services. The FSB has identified a number of reasons why banks have stopped providing banking services to remittance service providers, including profitability, perceived AML/CTF risks, divergence across jurisdictions in regulatory oversight of remittance service providers and a low level of compliance with international standards. The FSB makes 19 recommendations in four areas that it believes will improve access to banking services by remittance service providers. The four areas are:

• Promoting dialogue and communication between the banking and remittance sectors and supporting the remittance sector in developing codes of conduct;
• International standards and the oversight of the remittance sector by national regulators;
• The use of innovation in the remittance sector and how technical solutions might be used to enhance access to banking services for remittance service providers; and
• The provision of technical assistance for the remittance sector.

The FSB intends to report to the G20 in July 2019 on the steps and actions taken in relation to the recommendations. The FSB, the FATF, the Global Partnership for Financial Inclusion and the International Monetary Fund/World Bank will coordinate with each other to monitor how the recommendations are implemented and will report back to the G20 in July 2019.

View the 2018 Progress Report.

View the stocktake on remittance service providers' access to banking services.

View the updated Wolfsberg Group correspondent banking due diligence questionnaire.

View the FSB's correspondent banking data update.