A major threat to global remittance flows is De-risking—the practice where global commercial banks cut off correspondent relationships with local money transfer operators and banks in emerging markets to avoid potential regulatory penalties.

Global Banks Face Strict AML Fines ---> Terminate Correspondent Accounts ---> Remittance Operators Lose System Access ---> Flows Shift to Risky Informal Channels

When global banks terminate correspondent relationships, they drive transactions out of the formal, monitored banking system and into unregulated, cash-based markets, increasing financial crime risks. To combat de-risking, central banks work to strengthen domestic AML supervision, increase transparency across local transfer operators, and implement regional cross-border payment switches.