In a world where nearly $40 trillion in payments flows across borders every year, correspondent banking plays a critical role. The system allows a bank in one country to hold the deposits of a bank in another country and provide services for customers of that second bank. A popular service is transferring remittances — funds, often deposited as cash, that migrants send back to family in their home country.
Global remittance volume exceeds $500 billion each year, and Mexico ranks third as a recipient, after India and China. Analysts expect $45 billion in inflows this year from the U.S. alone to Mexico, or about 4% of that country’s gross domestic product.
Financial transactions between the U.S. and Mexico include more than remittances, of course. The two countries, now part of the USMCA trade pact, trade more than $700 billion in goods and services each year.
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