Cross-border payments are the backbone of the global economy, supporting everything from international trade to remittances and investment flows. Yet as the world becomes more interconnected, the systems that underpin international money movement are showing signs of strain.
According to the Bank for International Settlements (BIS), the number of active correspondent banking relationships—the traditional infrastructure for cross-border payments—has dropped by more than 25% over the past decade. This decline is creating growing concern among policymakers, financial institutions, and businesses about the fragmentation of global payment networks. With fewer direct connections between banks, the routes money must travel are becoming longer, more complex, and often more expensive.
Rising Regulatory Pressure
At the same time, regulators worldwide are tightening rules around data localization and transaction processing, further complicating international finance.
In Asia-Pacific, authorities are mandating that payment data remain within national borders, forcing institutions to rethink how they manage compliance while still meeting customer demand for global reach. In Latin America, regulators are prioritizing real-time settlement requirements, which can conflict with legacy correspondent banking rails designed around batch processing and delayed reconciliation.
This regulatory momentum is not limited to emerging markets. Across the European Union, initiatives like PSD2 and the upcoming digital euro framework are reshaping how cross-border transactions will be handled in the future.
For banks and financial institutions, these developments represent a difficult balancing act: they must maintain global reach while adhering to increasingly localized and real-time rules. The cost of building or rebuilding bilateral connections to comply with every jurisdiction’s requirements is quickly becoming unsustainable.
The Limits of Legacy Infrastructure
Legacy correspondent banking networks were designed decades ago. They rely heavily on manual processes, multiple intermediaries, and limited transparency. For businesses and consumers, this often translates into high fees, unpredictable settlement times, and opaque compliance checks.
While new entrants and fintech solutions have made progress in reducing friction, many institutions are still tied to outdated infrastructure that wasn’t built for today’s scale, speed, and complexity. The need for a new approach is no longer optional—it’s urgent.
A New Service-Layer Approach
This is where Austin Capital Trust (ACTC) provides a clear path forward. Rather than asking every financial institution to replicate costly infrastructure or juggle dozens of bilateral agreements, ACTC delivers a centralized service layer for international payments.
Here’s how it works:
- Centralized Routing and Formatting: ACTC standardizes how transactions are routed and formatted across borders, eliminating the need for each institution to maintain custom integrations for every market.
- Built-In Compliance: Regulatory requirements such as data localization and real-time settlement are embedded directly into the platform, allowing institutions to remain compliant without piecemeal fixes.
- Scalable Connectivity: Clients gain immediate access to a global network of payment corridors through a single connection, reducing complexity and speeding time to market.
- Enhanced Security and Reliability: With a unified infrastructure, institutions benefit from consistent safeguards and risk controls across all transactions.
The result is faster, safer, and more efficient international money movement, without the global overhead of building and maintaining legacy-style correspondent networks.
Staying Connected in a Fragmented World
The future of cross-border payments is being shaped by two competing forces: fragmentation driven by regulation and innovation driven by technology. Financial institutions that rely solely on legacy rails risk falling behind as global commerce continues to accelerate.
By adopting service-layer solutions like ACTC’s, institutions can stay connected to the global financial system while adapting quickly to regional compliance requirements. This allows them to focus on growth, client service, and innovation—rather than infrastructure maintenance.
In the race to modernize cross-border payments, the institutions that succeed will be those that embrace scalable, flexible, and compliance-ready infrastructure. With its streamlined approach, ACTC is helping clients not just keep pace with change, but lead the transformation.
