ABA Banking Journal - July 2008 - (Page 34) CORRESPONDENT BANKING Correspondent revival: no longer just a handshake business W hen pressed, Randy Shelden says the most definitive change in the correspondent banking business at Cornerstone Bank, York, Neb., occurred with the advent, nearly five years ago now, of image exchange. “Historically, we’d developed relationships that were rooted in geography, but image took away those boundaries and made it possible to work anywhere. That was when you started to see a longer more formal process around contracts,” says Shelden, who is senior vice-president for the $680 million assets, familyowned bank with 29 banking locations in 20 communities. Not that the practice of banks doing payments-, cash management-, or lending-related work on behalf of other banks hadn’t been a maze of operational details by tradition. It was just that, in the case of item processing work done by Cornerstone for a slew of banks throughout the state as well as clients in neighboring Wyoming and Colorado, a handshake alone would no longer suffice. Imaging as a technique requires extensive service level agreements (SLAs) that have to be evaluated several times before the work is handed over. Additional quality controls are required. “This business is more formal now,” Sheldon observes. While different niches in the complicated, interconnected universe of correspondent banking have been affected by disparate drivers, the payments and operations sector, which is the historical backbone of the business, has seen significant change in the past five years. Activity in this area alone has alerted the industry to the fact that banks doing work for other banks won’t be dying any time soon, notes Cathy Glassman, senior principal global payments solutions, Fiserv, Coral Springs, Fla. Glassman, who wrote a white paper on the subject of correspondent revival in payments a few years ago, continues to observe activity and a kind of entrepreneurial zeal in the sector. Image has shaken up the regional nature of the business, opening up the domestic map for banks and pitting once unlikely competitors against each other in regions where neither used to operate before, typically via white-labeled services. In other areas of correspondent work, from treasury services, to asset and liability management, to capital markets, increased automation has also tended to erase the importance of literally being the bank next door. Given that, bankers say, you often have to start discretely, from one point of entry in a niche service. This is because, on the surface, many banks increasingly By Lauren Bielski, senior editor have a similar story to tell. Really, the proof is in the work—and work done well over time. Know the client Mark Heugly, senior vice-president, Correspondent Banking Group, at $53 billion assets Zions Bank, Salt Lake City, Utah, agrees that correspondent work has both matured and reinvented itself in step with new business processes, and has expanded from payments into other valuable services on the funding side, and consequently, has taken itself more seriously. And, with the new vision and extensive service menu, comes a more formalized set-up. However, the Zions executive also thinks that the personal relationship is still the floor that holds big contracts and allows them to prosper over time. Understanding the client’s operational profile certainly counts in his organization, where, from 34 JULY 2008/ABA BANKING JOURNAL Subscribe at www.ababj.com http://www.cornerstoneconnect.com http://www.fiserv.com http://www.zionsbank.com http://www.ababj.com Table of Contents for the Digital Edition of ABA Banking Journal - July 2008 ABA Banking Journal - July 2008 Contents Editor’s Column Searching for New Paradigms at BIS Snapshot: C&I Asset Quality 100th Anniversary: Then & Now BofA "Event Concept" Wins Awards, and Customers ABA Resources ABA Chairman’s Position M&A: Beat Today's Market Blues Pass the Aspirin Cover Story: Workout Time Correspondent Banking: No Longer Just a Handshake Business Getting IT Right By Thinking It Through Webnotes Are You "Red Flag" Ready? Mailbox Banker’s Mart To Advertise/Index of Advertisers The Economy ABA Banking Journal - July 2008 http://www.nxtbook.com/naylor/BAKS/BAKS0515 http://www.nxtbook.com/naylor/BAKS/BAKS0415 http://www.nxtbook.com/naylor/BAKS/BAKS0315 http://www.nxtbook.com/naylor/BAKS2/BAKS1014 http://www.nxtbook.com/naylor/BAKS2/BAKS0914 http://www.nxtbook.com/naylor/BAKS2/BAKS0814 http://www.nxtbook.com/naylor/BAKS2/BAKS0714 http://www.nxtbook.com/naylor/BAKS2/BAKS0614 http://www.nxtbook.com/naylor/BAKS2/BAKS0514 http://www.nxtbook.com/naylor/BAKS2/BAKS0414 http://www.nxtbook.com/naylor/BAKS2/BAKS0314 http://www.nxtbook.com/naylor/BAKS2/BAKS0214 http://www.nxtbook.com/naylor/BAKS2/BAKS0114 http://www.nxtbook.com/naylor/BAKS2/BAKS1213 http://www.nxtbook.com/naylor/BAKS2/BAKS1113 http://www.nxtbook.com/naylor/BAKS2/BAKS1013 http://www.nxtbook.com/naylor/BAKS2/BAKS0913 http://www.nxtbook.com/naylor/BAKS2/BAKS0813 http://www.nxtbook.com/naylor/BAKS2/BAKS0713 http://www.nxtbook.com/naylor/BAKS2/BAKS0613 http://www.nxtbook.com/naylor/BAKS2/BAKS0513 http://www.nxtbook.com/naylor/BAKS2/BAKS0413 http://www.nxtbook.com/naylor/BAKS2/BAKS0313 http://www.nxtbook.com/naylor/BAKS2/BAKS0213 http://www.nxtbook.com/naylor/BAKS2/BAKS0113 http://www.nxtbook.com/naylor/BAKS2/BAKS1212 http://www.nxtbook.com/naylor/BAKS2/BAKS1112 http://www.nxtbook.com/naylor/BAKS2/BAKS1012 http://www.nxtbook.com/naylor/BAKS2/BAKS0912 http://www.nxtbook.com/naylor/BAKS2/BAKS0812 http://www.nxtbook.com/naylor/BAKS2/BAKS0712 http://www.nxtbook.com/naylor/BAKS2/BAKS0612 http://www.nxtbook.com/naylor/BAKS2/BAKS0512 http://www.nxtbook.com/naylor/BAKS2/BAKS0412 http://www.nxtbook.com/naylor/BAKS2/BAKS0312 http://www.nxtbook.com/naylor/BAKS2/BAKS0212 http://www.nxtbook.com/naylor/BAKS2/BAKS0112 http://www.nxtbook.com/naylor/BAKS2/BAKS1211 http://www.nxtbook.com/naylor/BAKS2/BAKS1111 http://www.nxtbook.com/naylor/BAKS2/BAKS1011 http://www.nxtbook.com/naylor/BAKS2/BAKS0911 http://www.nxtbook.com/naylor/BAKS2/BAKS0811 http://www.nxtbook.com/naylor/BAKS2/BAKS0711 http://www.nxtbook.com/naylor/BAKS2/BAKS0611 http://www.nxtbook.com/naylor/BAKS2/BAKS0511 http://www.nxtbook.com/naylor/BAKS2/BAKS0411 http://www.nxtbook.com/naylor/BAKS2/BAKS0311 http://www.nxtbook.com/naylor/BAKS2/BAKS0211 http://www.nxtbook.com/naylor/BAKS2/BAKS0111 http://www.nxtbook.com/naylor/BAKS2/BAKS1210 http://www.nxtbook.com/naylor/BAKS2/BAKS1110 http://www.nxtbook.com/naylor/BAKS2/BAKS1010 http://www.nxtbook.com/naylor/BAKS2/BAKS0910 http://www.nxtbook.com/naylor/BAKS2/BAKS0810 http://www.nxtbook.com/nxtbooks/sb/ababj0710 http://www.nxtbook.com/nxtbooks/sb/ababj0610 http://www.nxtbook.com/nxtbooks/sb/ababj0510 http://www.nxtbook.com/nxtbooks/sb/ababj0410 http://www.nxtbook.com/nxtbooks/sb/ababj0310 http://www.nxtbook.com/nxtbooks/sb/ababj0210 http://www.nxtbook.com/nxtbooks/sb/ababj0110 http://www.nxtbook.com/nxtbooks/sb/ababj1209 http://www.nxtbook.com/nxtbooks/sb/ababj1109 http://www.nxtbook.com/nxtbooks/sb/ababj1009 http://www.nxtbook.com/nxtbooks/sb/ababj0909 http://www.nxtbook.com/nxtbooks/sb/ababj0809 http://www.nxtbook.com/nxtbooks/sb/ababj0709 http://www.nxtbook.com/nxtbooks/sb/ababj0609 http://www.nxtbook.com/nxtbooks/sb/ababj0509 http://www.nxtbook.com/nxtbooks/sb/ababj0409 http://www.nxtbook.com/nxtbooks/sb/ababj0309 http://www.nxtbook.com/nxtbooks/sb/ababj0209 http://www.nxtbook.com/nxtbooks/sb/ababj0109 http://www.nxtbook.com/nxtbooks/sb/ababj1208 http://www.nxtbook.com/nxtbooks/sb/ababj1108 http://www.nxtbook.com/nxtbooks/sb/ababj1008 http://www.nxtbook.com/nxtbooks/sb/ababj0908 http://www.nxtbook.com/nxtbooks/sb/ababj0808 http://www.nxtbook.com/nxtbooks/sb/ababj0708 http://www.nxtbook.com/nxtbooks/sb/ababj0608 http://www.nxtbook.com/nxtbooks/sb/ababj0508 http://www.nxtbook.com/nxtbooks/sb/ababj0408 http://www.nxtbook.com/nxtbooks/sb/ababj0308 http://www.nxtbook.com/nxtbooks/sb/ababj0208 http://www.nxtbook.com/nxtbooks/sb/ababj-compsurv08 http://www.nxtbook.com/nxtbooks/sb/ababj0108 http://www.nxtbook.com/nxtbooks/sb/ababj1207 http://www.nxtbook.com/nxtbooks/sb/ababj1107 http://www.nxtbook.com/nxtbooks/sb/ababj1007 http://www.nxtbook.com/nxtbooks/sb/ababj0907 http://www.nxtbook.com/nxtbooks/sb/ababj0807 http://www.nxtbook.com/nxtbooks/sb/ababj0707 http://www.nxtbook.com/nxtbooks/sb/ababj0607 http://www.nxtbook.com/nxtbooks/sb/ababj-jackhenry http://www.nxtbook.com/nxtbooks/sb/ababj0507 http://www.nxtbook.com/nxtbooks/sb/ababj0407 http://www.nxtbook.com/nxtbooks/sb/ababj0307 http://www.nxtbook.com/nxtbooks/sb/ababj-compsurv07 http://www.nxtbook.com/nxtbooks/sb/ababj0207 http://www.nxtbook.com/nxtbooks/sb/ababj0107 http://www.nxtbook.com/nxtbooks/sb/ababj1206 http://www.nxtbook.com/nxtbooks/sb/ababjcompsurv2006 http://www.nxtbookMEDIA.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.