CashNews.co
BNY and Mizuho Bank, the oldest banks in the US and Japan, respectively, announced on Sunday an agreement to expand their correspondent bank network to help facilitate international trade.
Powered by BNY’s Trade Network Access Service, the agreement allows both banks to access each other’s Relationship Management Applications (RMAs).
“We were hearing from some of our clients, who have limited infrastructure, but were having to process a single Letter of Credit once every three years for a certain bank,” states Jennifer Barker, global head of Treasury Services and Depositary Receipts, BNY. “So we came up with the idea of an RMA-as-a-Service concept so they don’t have to invest their own capital in it.”
“By leveraging BNY’s RMAs, we have access to over 4,000 bank branches,” explains Tsutomu Yamamoto, managing executive officer, head of Global Transaction Banking Unit at Mizuho Bank. “Setting up RMAs one-by-one by ourselves is costly and time consuming, so it makes much more sense for us to do this collaboration.”
In addition to cost savings, Ashutosh Kumar, co-head of Global Transaction Banking for Asia & Oceania, Mizuho says it also allows Mizuho to connect its clients to many more of their counterparties. “Traditionally most banks have RMA with X number of banks, but by bringing both our networks together we can connect to many more, and BNY has created a very good online portal, where you can very seamlessly search which banks are available.”
An RMA is just one component, and Joon Kim, global head of Trade Finance Product and Portfolio Management at BNY, says that once an RMA is in place to advise on a letter of credit, BNY will be working on ways to create more efficiencies, for what remains a manually intensive process.
GenAI, for example, will help banks to not just connect but to move letters of credit faster. For two old banks this is an exciting step towards the digitalization of trade.
#cashnews #UnitedStates #newsfinace #finance #FollowsCashnews