Behind the scenes of every international wire transfer, there’s a complex network of banks moving money across borders. For community banks and credit unions, understanding the roles of each party involved from correspondent banks, intermediary banks, to beneficiary banks, is critical to improving efficiency, reducing costs, and unlocking new non-interest income.
Let’s break down each role and then talk about how modern platforms like Acceleron change the equation. With automation, community financial institutions can shorten the payment path, reduce reliance on intermediaries, bring FX in-house, and finally keep the revenue that has historically leaked out of the process.
Most international payments involve at least four players:
Originator Bank – where the transaction starts (your local bank)
Correspondent Bank – moves money on behalf of your bank
Intermediary Bank – helps bridge gaps between correspondent and beneficiary banks
Beneficiary Bank – receives and credits the funds to the recipient
Each bank plays a specific part in the flow of funds, compliance, and FX conversion.
The originator bank is the financial institution where the sender initiates the wire transfer. If you’re sending money abroad, your community bank or credit union is the originator.
Key responsibilities:
Collect wire instructions
Validate the recipient
Send the payment into the correspondent banking network
A correspondent bank provides services on behalf of the originator bank, especially when the originator can’t directly access the foreign banking system.
Typical services include:
International payments automation
SWIFT wire processing
Foreign exchange (FX) conversion
Most community banks and credit unions don’t have the infrastructure to support direct international transactions. Instead, they contract with correspondent banks to handle cross-border settlement.
An intermediary bank is often inserted into the flow when the correspondent bank doesn’t have a direct relationship with the beneficiary bank. It acts as a bridge between institutions to move funds along the chain.
However, each intermediary adds:
More fees
Slower processing times
Increased complexity and operational risk
The beneficiary bank is the institution that credits the final recipient’s account.
This bank:
Accepts the incoming funds
Posts them to the beneficiary’s account
May charge additional fees, especially for currency conversion
In some cases, the beneficiary bank has its own intermediary, further complicating the payment path.
|
Feature |
Correspondent Bank |
Intermediary Bank |
Beneficiary Bank |
|
Role in Payment Flow |
Moves funds on behalf of the originator bank |
Routes funds when no direct connection exists between correspondent and beneficiary |
Receives and credits funds to the final recipient |
|
Who They Serve |
Originator bank (sending side) |
Beneficiary’s correspondent bank |
End customer (receiving side) |
|
Direct Relationship with Originator? |
Yes |
No |
No |
|
Adds to Transaction Cost? |
Yes |
Yes |
Sometimes (e.g. receipt or FX fees) |
|
Opportunity for Automation |
High – via FX automation and correspondent banking software |
Limited – but can often be bypassed |
None – typically end of payment chain |
|
Revenue Potential for Originator |
High – capture FX spread in-house using tools like NudgeConvert™ |
None – intermediaries typically retain FX margin |
None – revenue flows to beneficiary institution |
In a traditional cross-border wire:
The originator bank sends the payment to its correspondent bank
That correspondent may route through one or more intermediary banks
Eventually, the funds arrive at the beneficiary bank
Along the way, multiple institutions take fees and add delay
For community banks and their customers, this results in:
Higher costs
Lack of transparency on FX rates
Manual entry errors
Reduced profitability
Here I explain how the process works:
At Acceleron, we’re rebuilding the correspondent banking model from the ground up, with a focus on wire automation, FX transparency, and speed. Here’s how we’re shortening the payment chain:
Our goal is to remove as many banks from the process as possible. Fewer hops mean fewer fees and faster delivery. This translates into higher profits for the originator bank and lower costs for the end customer. Fewer banks means more profits for your originator bank, and that equals less fees you have to pay.
Most banks lose FX revenue to foreign intermediaries. With Acceleron’s NudgeConvert™ technology, community FIs can bring FX in-house, converting currency at the point of origination, and capturing the foreign exchange spread for themselves.
Instead of routing through multiple correspondent and intermediary banks, NudgeConvert gives community banks:
Ability to perform the currency conversion in-house
Automated pricing and margin control
Ownership of the FX markup
Read more: How NudgeConvert Maximizes Profitability
Here is a demo of how NudgeConvert might look in your customer facing banking app:
By combining automated international wire transfers, smart routing, and deep integration with platforms like Fiserv, Aptys, and Braid, Acceleron allows community banks to eliminate manual entry, accelerate wire processing, and improve customer experience.
The more banks in the middle, the slower and more expensive a wire becomes. With Acceleron, community financial institutions can modernize their cross-border payments, capture new revenue, and finally compete at the global level, without the complexity.
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