What is the purpose of the remittance sector? Is it merely to make a profit? Yes, profit is important because it helps us sink money into research, development, and the creation of new products and networks. But I would argue that the financial and remittance sectors should recognise that their primary motive is to serve customers effectively – which is the only way to guarantee long-term success across the globe.
Creating new value for customers requires financial sector players to cooperate. Collaboration is the need of the hour, and can help unlock benefits for both industry players and our customers.
First, let’s look at the industry context, because the remittance industry thrives even when global economies don’t. The remittance industry is currently worth some USD 600 billion1 globally. Regular money transfers from diaspora populations power many an emerging market. Remittances account for over 29.4% of Nepal’s GDP and 9.4% of Sri Lanka’s2. They are worth 6.9% of Pakistan’s GDP and 8.6% of Bangladesh’s, exceeding official aid to these countries. In fact, global remittances are three times higher than aid flows.
Meanwhile, GCC countries host expats from at least 6 of the top 10 remittance receiving countries worldwide. The Kingdom of Saudi Arabia & the United Arab Emirates are amongst the top 3 remittance sending countries in the world, standing at number 2 and 3 respectively. The UAE – India remittance corridor is the 4th largest in the world.
Within this huge network of money flows, there is massive potential for financial providers to collaborate for new opportunities. It’s a fact that banks and money transfer brands both want to add value to the consumer and ensuring an excellent experience. There are natural synergies to working together. That’s why Xpress Money invests considerable time and resources in partnering with banks and other financial institutions to create a seamless value chain. For instance, our recent partnership with RAK Bank means that all the bank’s customers can remit money through the bank’s online platform at no extra cost while taking advantage of Xpress Money’s global reach and efficiencies.
Collaboration between banks and IMTOs (International Money Transfer Organisations) can deliver a one-partner, one-settlement approach for a complete remittance solution. These integrated financial solutions benefit the industry, empower customers and help entire economies. They also let banks cross-sell to existing customers and improve loyalty.
Meanwhile, banks benefit from IMTOs’ global networks without needing to open their own branches. Their clients enjoy a one-stop platform from where to remit money. Beneficiaries can receive money without a bank account thanks to IMTO’s global payout network. This way closer partnerships between IMTOs and banks can also help the industry reach out to the unbanked sector – potentially unlocking a vast target audience. For example, besides cash payouts, Xpress Money, also offers a plethora of channels to receive funds without a bank account, including mobile wallets and prepaid cards.
It is currently a very exciting, but also challenging time for the remittance and financial sectors. But even in the face of rapid change, one thing remains certain: collaboration and partnerships between industry players are essential for unlocking further growth by serving customers better, through integrated solutions.
Written by Sudhesh Giriyan, COO, Xpress Money