At oceanic margins, syn-convergent exhumation, subduction erosion, and inter-plate coupling are intimately related, but ample questions remain concerning their interaction and individual mechanisms. To analyze these interactions for a thick-skinned, visco-elastic wedge, we focus on properly modeling stresses, energies, and topographies at the inter-plate and wedge bounding interfaces using a Coulomb frictional contact algorithm. In this innovative plane-strain, free surface, Lagrangian finite element model, fault dynamics is modulated by retreating subduction. Subduction is dynamically driven by slab-pull due to a slab sinking in a semi-analytic, computationally favorable approximation of three-dimensional induced mantle flow. Nodal trajectories show that continuous underthrusting of a slab induces a steady state corner flow through forced underplating and subsequent trenchward extrusion due to gravitational spreading. This flow pattern confirms early-proposed models of syn-orogenic deep-seated rock exhumation propelled by coexisting extension and continuous shortening at depth. A distinct reduction in upward flowing material and accompanying decrease of exhumation velocities, to millimeters per year as observed in nature, is induced by a diversion of orogenic wedge material toward the mantle once a subduction channel is formed. The key parameter affecting model evolution and spontaneous formation of a subduction channel is basal friction, which modulates the amount of erosion. However, formation of a subduction channel entrance needs to be ensured through the deformability of the overriding plate, which is influenced by applied pressure at the overriding plate tip and material properties. The down dragging of the overriding plate is sufficient above a threshold inter-plate shear stress of about 2–7 MPa.