Safeguarding humanitarian banking channels: how, why and by whom?

Published 31. Mar 2023
Policy and technical solutions that safeguard humanitarian banking channels to sanctioned jurisdictions are urgently needed. The worsening phenomenon of financial sector bank derisking is rapidly increasing the number of countries cut off from financial banking channels.

This report is the first in a four-part series examining potential solutions to bank derisking. It is based on the outcome of an expert dialogue held in June 2022 on the protection of humanitarian banking channels. The dialogue brought together experts from governments and academia as well as the financial and humanitarian sectors to discuss what solutions are needed to safeguard existing payment pathways and how to create new ones when required.

The report finds:

  • Correspondent banks remain the main blockage to humanitarian payment channels. More guidance and engagement are needed from governments and regulators to correspondent banks to support humanitarian banking channels into high-risk jurisdictions.
  • Investment is needed to understand the opaque and fast changing correspondent banking environment. Regulators should take steps to engage directly with correspondent banks to provide guidance and comfort as well as to establish trust on the need to facilitate humanitarian transactions.
  • Improving sanctions design is necessary across all multilateral and autonomous regimes to anticipate and mitigate their impacts on humanitarian banking channels.
  • Innovative solutions should be explored including the use of Fintech, of new or existing public bodies to transfer funds as well as of non-mainstream currencies.

Recommendations are provided that identify the most promising policy solutions to safeguard humanitarian banking channels.