Ascend in Digital Remittances
The digitalization has evolved the practice of sending remittances around the world. People send money online to their loved ones, without have to travel to a shop or a bank. They technology has provided them the opportunity to send money globally, while having dinner or watching their favorite season. The growing awareness of technology among people has created a space for the money service businesses (MSBs) to shift their focus from traditional form of sending remittance where a customer has to visit an agent location to a cost effective and time efficient digital form. The sharp rise in the online money transfers has also risen the level of competition among the MSBs.
Changing Trends of Marketing
The MSBs in the race to become the leaders in the remittance industry are employing different tactics to attract customer’s interest that would lead them to build customer loyalty in the long run. The companies are offering their customers with best possible exchanges rate and lower transfer fees in order to woo them. They best money transfer companies are spending a large chunk of their marketing budget on digital marketing, including search engine optimization (SEO). SEO helps to improve the ranking of the websites that would result in increased traffic of the potential customers to the respective websites, hence increase in revenues. However, at the same time the remittance industry is going through very tough time, on account of increased level of monitoring and checks by the regulators. Recently, a money transmitter has been fined a record amount of £7.8m for non-compliance with regulations (Smith, 2019).
The Risks Lurking on the Remittance Industry
The risks attached to the remittance sector are critical, because of the possible exploitation of the loop holes by the money launderers and terror financers. These risks are mitigated through a robust risk management framework implemented by the MSBs. The customers need to understand that the companies are not interested in their wage slips, bank statements or tax returns to see how much one earns, these documents serve the purpose of segregating funds with legitimate source with that of illegitimate source. Money transfer service is a two-way process, the responsibility to identify criminals lies both with MSBs and the customers.
Boost to Both the Beneficiary and the Beneficiary’s Country
Remittances not only serves as a great source of livelihood for the beneficiaries of low and middle income countries but also helps in bringing financial stability to beneficiary countries. According to the World Bank news report, “In 2019, remittance flows to low- and middle-income countries are expected to reach $550 billion, to become their largest source of external financing (The World Bank, 2019).”Therefore, remittances play an integral part in the financial development of an economy especially those of developing economies, so, money transfer companies should encourage and facilitate remitters as long as they are through legal route.