BNY, the oldest bank in the United States and Japan, and Mizuho Bank on Sunday announced an agreement to expand their correspondent banking network to help facilitate international trade.
The agreement will enable both banks to access each other’s relationship management applications (RMAs) using BNY’s trade network access services.
“Despite our limited infrastructure, we were hearing from customers that they had to process one letter of credit every three years with a particular bank,” said BNY Financial. said Jennifer Barker, Global Head of Services and Depositary Receipts. “So we came up with the idea of an RMA-as-a-service concept so that customers didn’t have to invest their own capital.”
“By leveraging BNY’s RMA, we now have access to over 4,000 bank branches,” explains Tsutomu Yamamoto, Managing Executive Officer and Head of Global Transaction Banking at Mizuho Bank. “Setting up each RMA ourselves is expensive and time-consuming, so this collaboration makes a lot of sense.”
Ashutosh Kumar, Mizuho’s co-head of global transaction banking for Asia and Oceania, said that in addition to cost savings, Mizuho will also be able to connect customers with more trading partners. “Traditionally, most banks did RMAs for X number of banks, but by integrating both networks, we will be able to connect to more banks and BNY will be able to search available banks very seamlessly. We have created a very nice online portal.”
RMA is just one component, and Joon Kim, BNY’s global head of trade finance products and portfolio management, explains how BNY can become even more efficient once RMA is in place for advising on letters of credit. He says he will work on it. It still requires a manual intensive process.
For example, GenAI helps banks not only connect but also move letters of credit faster. For the two legacy banks, this is an exciting step towards the digitalization of trade.
