Rails & networks
What is Correspondent banking?
Correspondent banking is the traditional model where banks hold accounts with each other to move money across borders. A payment hops through a chain of intermediary banks, each adding time, fees, and FX spread. It is the legacy backbone of cross-border payments and the main reason they are slow and opaque.
Each intermediary in the chain debits and credits nostro/vostro accounts, applies its own cut-off times, and may deduct fees, so the recipient often gets less than expected with little transparency. Modern orchestration reduces or removes correspondent hops by routing over local and instant rails.