Banks' No-Win Choice Over Remittances

From American Banker

“Barclays is in an awkward situation that will ring familiar to bankers in the U.S. The U.K. bank has been terminating relationships with money transmitters, including several that wire funds to Somalia, a ravaged country that relies heavily on remittances from immigrants in the West. The bank says it's uncomfortable with the risk and expense of serving these businesses in light of recent fines levied against big financial institutions for anti-money laundering lapses. But now it's being accused of starting a humanitarian crisis.”

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What we are reading … 6th February 2013

How to Communicate on Projects http://shar.es/CO8wT

Usernames and passwords: everybody hates them http://www.finextra.com/Community/FullBlog.aspx?blogid=7337

Take aim at operational risk-before it bites you http://www.ababj.com/blog/5638.html#.UQt6DwJRNNo.twitter

UK banking reforms: What's new? http://www.bbc.co.uk/news/business-21322701

Big Data Is A Retail Bank Marketing Mirage http://shar.es/COqwZ

Increased Transparency: Byproduct of Improving Technology http://www.finextra.com/Community/FullBlog.aspx?blogid=7339

African Migrants Could Save US$4 Billion Annually on Remittance Fees http://shar.es/COOut

The Problem With How We Prepare for Disasters http://shar.es/CO2hz

Banks Face the Innovator's Dilemma http://www.finextra.com/Community/FullBlog.aspx?blogid=7341

Orange and MFS Africa launch international money transfer to Mali

“Orange and MFS Africa have announced the addition of Mali to the growing portfolio of countries able to receive international remittances via Orange Money Transfer International (OMTI). Orange Money customers in Mali can now receive international remittances directly to their Orange Money accounts.” <<READ MORE>>

Kenyan remittances up

Kenyans abroad sent home an estimated eight billion shillings in January, higher than any month in 2011 and up 40 percent from the same month a year earlier, according to the Central Bank of Kenya (CBK). In its monthly update on the remittances, the CBK noted that North America still remained the largest source of the remittances.

Now is the time to intensify your staff training

The current climate has made it a busy and volatile time for both risk managers and operations professionals. These conditions have also made it the ideal time to intensify staff training in order to remain competitive. Well-trained employees are knowledgeable and more motivated and will find new ways of generating revenue or protecting the banks operations in the tough times we now find ourselves in.

We list below Operations & Payments Training that is coming up over the next few months. Just click on the course name for full details.

INTERNATIONAL PAYMENTS – Johannesburg – 6/7 February

REMITTANCES - ISSUES & OPPORTUNITIES – Johannesburg – 8/9 February

BUSINESS CONTINUITY & SCENARIO PLANNING – Singapore – 14/15 February

OPERATIONS RISK MANAGEMENT FOR NON-RISK MANAGERS – Singapore – 16/17 February 

TRAINING COURSE “REMITTANCES – ISSUES & OPPORTUNITIES”

Johannesburg – 8 & 9 February 2012

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

The flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. The total value of these remittances has been increasing steadily over the past decade. Recent estimates show that the total value worldwide was over US$ 316 billion, involving some 190 million migrants.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

For a fully descriptive brochure please send a blank e-mail to courses@citadeladvantage.com with REMIT-JHB in the Subject line.

Who Should Attend

The course has been specifically designed for Senior Bankers involved with;

• Payment Systems and Money Transfers 
• Payment Strategy 
• Micro Finance 
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking 
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers 
• Money Transfer Operators 
• Government agencies involved in migrant workers
• Development Agencies

Remittance Opportunities – Workshops in London and Johannesburg

It is still very expensive to send remittances to African countries, particularly within Africa. These high remittance costs encourage the use of informal channels and are an unnecessary burden for African migrants and remittance recipients.

Recent recommendations by the African Development Bank and the World Bank indicate organizations with large branch networks, such as post offices, savings and credit cooperatives, rural banks, and microfinance institutions can play an important role to expand access to remittances and other financial services among the poor and in rural communities.

Where can you catch these courses?

• London - 16 & 17 May 2011
• Johannesburg - 22 & 23 June 2011

For course details and a descriptive brochure please e-mail us at courses@citadeladvantage.com

Please indicate which course you are interested in – London or Johannesburg.

WorldRemit, says it has simplified the remittance process

Remittances sent from abroad are a lifeline for millions in Africa, and now online services are aiming to make it quicker and easier to transfer money to the continent.

According to the World Bank and the African Development Bank, members of the African Diaspora send home around $40 billion every year. But the actual figure is probably significantly higher as a large proportion of funds are transferred through various informal channels.

Ismail Ahmed, founder and chief executive of WorldRemit, says he's found a way to make the whole process easier, while helping Africa minimize its dependence on cash.

His service allows users to send money to family and friends without having to visit agents and collect cash from their bank accounts. They can process transactions online, while funds are immediately available for collection in Africa, or credited to mobile accounts of recipients.

In this interview with CNN's Nima Elbagir, Ahmed said: "We are helping to move towards cashless economies in many parts of Africa."

Post offices, savings and credit cooperatives, rural banks, and microfinance institutions have an important role in Remittances services

Recorded remittances into Africa, grew fourfold between 1990 and 2010 to reach nearly $40 billion in 2010. These funds are the continent’s largest source of foreign capital after foreign direct investments. Recent surveys show that investments such as land purchases, building a home, and starting a business were the highest uses of remittances sent home by the African diaspora.

However, official remittance flows to Africa are significantly underestimated, as only about half of the countries in Sub-Saharan Africa collect and report remittance data with any regularity.

It is still very expensive to send remittances to African countries, particularly within Africa. These high remittance costs encourage the use of informal channels and are an unnecessary burden for African migrants and remittance recipients.

Recent recommendations by the African Development Bank and the World Bank indicate organizations with large branch networks, such as post offices, savings and credit cooperatives, rural banks, and microfinance institutions can play an important role to expand access to remittances and other financial services among the poor and in rural communities.

Factors such as exclusive agreements with money transfer operators, which limits competition and tends to increase the cost of sending money should be avoided. The impact and other implications of telecom companies in Africa who offer mobile money transfers and other financial services need to be assessed for banking stability and systemic risk.

Countries from which African migrant workers send money are of course worldwide. Top destinations for African migrants are France (9% of total emigrants), Cote d’Ivoire (8%), South Africa (6%), Saudi Arabia (5%), and the United States and the United Kingdom (4% each).

Citadel Advantage runs a two day intensive course on Payments, Remittances and Opportunities. This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool including an in-depth case study of Kenya’s world standard setting M-PESA system.

The course is intended for any organization in the payments and remittances space – banks, post offices, credit unions, microlenders, development agencies etc.

Where can you catch these courses?

• London on 16 & 17 May 2011
• Johannesburg on 22 & 23 June 2011

For course details and a descriptive brochure please e-mail us at courses@citadeladvantage.com

Please do indicate which course you will be interested in – London or Johannesburg.

Banks, Payments & Migrant Workers Remittances

Many banks think that because they offer a set range of payment products and solutions the potential lucrative Remittances market is just waiting to be picked.

But remittances are more than expanding your bank payment products to the Migrant Worker community. It is all about survival. It is all about banks maintaining their niche in the payments space, an area that has traditionally been the domain of the banks.

Today this is under threat. And where do the threats come from? From alternate payment systems – operations such as informal systems like Hawala to a whole range of new purpose built systems like PayPal, Google Checkout, Amazon Payments, to mention but a few.

Mobile payments are also on the move and the network operators are dying to capture huge new revenue streams from millions of clients that they already service through their mobile payment networks.

A few of the big banks have dipped their toes into the remittance market, many have only announced plans to do so – and seem to be sitting back with many others waiting in the sidelines.

Remittance payments through alternative payment mechanisms are here to stay. Banks really have no alternative but to play in the game or to lose out. Banks need to take advantage of the different options available to them while leveraging their consumer and merchant relationships, their existing payment infrastructure and their strong secure operational processes.

Please join us for “REMITTANCES – CREATING VALUE”, a two day intensive course on Payments, Remittances and Opportunities. This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

London - 16 & 17 May 2011 – For additional details please CLICK HERE.

Johannesburg - 22 & 23 June 2011 – For additional details please CLICK HERE.

TRAINING COURSE “REMITTANCES – CREATING VALUE”

Johannesburg – 22 & 23 June 2011

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

The flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. The total value of these remittances has been increasing steadily over the past decade and it is estimated that in 2009 the total value worldwide was over US$ 316 billion equivalent, involving some 190 million migrants.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

For a fully descriptive brochure please send a blank e-mail to sharon@citadeladvantage.com with REMIT-JHB in the Subject line.


Who Should Attend

The course has been specifically designed for Senior Bankers involved with;

• Payment Systems and Money Transfers
• Payment Strategy 
• Micro Finance 
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking 
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers 
• Money Transfer Operators 
• Government agencies involved in migrant workers

Development Agencies

Course Venue:

REGUS Sandton,
Nelson Mandela Square
West Tower, 2nd Floor, Nelson Mandela Square
Maude St.
Sandown
Johannesburg 2146
Tel: +27 (0) 11 881 5600

TRAINING COURSE “REMITTANCES – CREATING VALUE”

London – 16 & 17 May 2011

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

For a fully descriptive brochure please send a blank e-mail to sharon@citadeladvantage.com with REMIT-LONDON in the Subject line.


Who Should Attend
The course has been specifically designed for Senior Bankers involved with;

• Payment Systems and Money Transfers 
• Payment Strategy 
• Micro Finance
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking 
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers
• Money Transfer Operators 
• Government agencies involved in migrant workers

Development Agencies

Course Venue:

REGUS Trafalgar,
1 Northumberland Avenue,
Trafalgar Square,
London WC2N 5BW

Card-to-card money transfer system introduced by Visa

Visa has launched a new person-to-person payment service that allows users to transfer funds other cards over the VisaNet network.

The service was activated for the first time by Russia's “1st Processing Bank” and Ukraine's largest bank, “PrivatBank” earlier this week.

Visa is in the process of rolling the service out internationally, with a view to capturing market share from PayPal, and other emerging mobile remittance platforms.

Using the new service is simple. Senders provide their bank with the recipient's Visa card number to initiate the payment. Visa says the process does away with the need for senders to fill out complicated forms and provide routing information such as bank codes and branch addresses.

When processed through VisaNet, funds are credited directly to the eligible Visa credit, debit or prepaid account within minutes, freeing recipients from having to visit agent locations to collect cash.

Vikram Modi, Head of Digital Money Transfer and Personal Payments for Visa’s international markets, said that this milestone for Visa in Russia and Ukraine is only the beginning of a new wave of personal payment services on Visa cards – including person-to-person payments, mobile money transfer, electronic bill pay, prepaid reloads and intra-account transfers.

New international remittance service launched in Ghana

MTN Ghana and the Belgian carrier BICS are set to launch international remittances services. MTN Ghana will use “HomeSend”, a mobile centric remittance hub operated by BICS and powered by its technology partner eServGlobal. The new service will enable Ghanaians living in the UK and Belgium to send funds directly to their relatives’ mobile money accounts in Ghana. MTN Ghana had 760,000 mobile money registered accounts in mid-2010.

Remittances to Zimbabwe – on the rise

The Reserve Bank of Zimbabwe (RBZ) has said that remittances from Zimbabweans living abroad increased 32.9% in 2010 to about US$263.3 million.

Figures released by the central bank showed that remittances had increased significantly from the US$198.2 million recorded in 2009.

“The growth rates primarily reflected the market’s confidence in the formal channel of remitting free funds,” the central bank said in a recent economic update.

“In the outlook, the sector is poised to grow in 2011 due to the broadening of the Bureau De Change operating framework.”

Millions of Zimbabweans now live in neighbouring Botswana and South Africa while others have settled in Europe and the United States. Most left the country over the last decade to escape a biting economic crisis characterized by the country’s world record inflation and high unemployment.

The vast majority Zimbabwean expatriates send money back home to support their families.

Philippines remittances may top $20 billion

Remittances channeled through banks by migrant Filipino workers may exceed $20 billion this year, Bangko Sentral, the central bank said over the weekend.

Bangko Sentral Deputy Gov. Diwa Guinigundo said the bank saw money remitted by the workers increasing by about 8% in 2011, matching the projected 8- percent growth in 2010.

“But we have to review that,” Guinigundo added.

Remittances in 2010 were projected to reach $18.7 billion, based on the 8-percent growth assumption from $17.3 billion in 2009.

Data showed that remittances in the first 10 months of 2010 rose 7.9% to $15.5 billion. The bulk of the remittances came from Filipinos living or working in the United States, Canada, Saudi Arabia, Japan, the United Kingdom, United Arab Emirates, Singapore, Italy, Germany and Norway.

A projected 8-percent growth in remittances in 2011 will bring the total to $20.196 billion this year. The projected figure represents only those captured by banking channels.

A local bank also expects remittances to grow 5 to 10 percent this year. “Consequently, this could continue to underpin consumer spending which accounted for about 78 percent of the Philippine economy,” said Mike Ricafort, assistant vice president and head of domestic and global research of Rizal Commercial Banking Corp.

Bangko Sentral said the deployment outlook for Filipinos overseas remained upbeat given the continuing bilateral talks with some host countries, aimed at matching manpower requirements with the competencies of Filipino workers.

Remittances, which contribute more than 10 percent to the gross national product, are expected to help the economy achieve strong growth this year and support the appreciation of the peso against the US dollar.

Guinigundo said the peso was expected to trade at 43 to 45 against the US dollar this year while the gross domestic product would grow within a range of 7 to 8 percent.

RCBC, meanwhile, expects the peso to range 41.50 to 43.50 against the US dollar by December this year.

Remittances are seen to keep the country’s balance of payments in a surplus in 2011, although this would not be as strong as the $13.2 billion recorded in the January-November period last year, Guinigundo said.

The recovery in imports this year is seen to result in a wider trade deficit and a narrower BoP surplus, according to the government’s economic managers.

Exports in 2010 grew faster than imports, translating into a lower trade deficit. Total imports in the first 10 months of 2010 grew 26.3 percent year-on-year to $44.826 billion while exports surged 37.2 percent to $43.084 billion.

Uganda’s remittances set to hit Shs2 trillion - Bank of Uganda

Dr David Kihangire, the Bank of Uganda executive director, has said Uganda will this year receive Shs2.2 trillion up from Shs1.7 trillion received last year from Ugandans working abroad.

“Projections show that remittance in 2010 will amount to $980.9 million (Shs2.2 trillion)” Dr. Kihangire said recently at a conference aimed at encouraging Ugandans in the Diaspora to invest back at home.

He attributed the increase to the number of Ugandans going to work abroad and the fact that majority at work, have not lost their jobs despite the global recession in the last two years.

A report by the World Bank; “Migration and Remittances Factbook 2011” released in November attributed the increase in remittances to the global economic recovery, which has resulted into job stability and new jobs for millions of immigrants from developing countries.

Globally remittances are expected to reach $440 billion up from $416 billion in 2009 according to the report. “Remittances help in time of crisis and distress. Remittances impact on poverty and welfare through a multiplier effect,” Dr Kihangire told participants at the 4th annual Diaspora Home is the Best Summit in Kampala yesterday.

Most of those working abroad send home money to friends and relatives for education and health purposes with little going to investment activities according to BoU.

The remittances mainly originate from Europe and America according to a recent BoU survey. “In Uganda, 50 per cent of remittances recorded have been used for education and health expenses. 40 per cent is attributed to savings and investment while 10 per cent goes to social activities,” he said.

Migrant Remittances to Bulgaria hit new high

There has been an increase in the amount of remittances from Bulgarians working abroad over the last twelve month up until October this year, according to a new report just published.

The net sum of the remittances from Bulgarians permanently working abroad totaled €702 million during the period from October 2009 to October 2010, according to data from the Bulgarian Central Bank.

Studies show that the actual money sent home are about 30-40% higher that the official figures.

Experts say the rise in remittances to Bulgaria will have a positive impact on the Bulgarian economy and expand the domestic economy.

Remittances from migrant workers are a lifeline to large sections of the Bulgarian economy, particularly the retail trade and the housing market.

According to the World Bank, Bulgaria has one of the highest proportions of its population working abroad of any country in the world and remains one of Europe's biggest recipients of remittances.

Approximately 1.2 million Bulgarians currently live abroad, equal to 16% of the population.

The biggest Bulgarian communities are based in Spain, Germany, Greece, Italy, Romania and Turkey.

EU remittances down 7% in 2009 - official statistics

Worker remittances in the European Union declined by seven per cent in 2009 as the economic recession broke the trend for steady annual increases of the figure, the bloc's statistics bureau Eurostat said on December 13.

Total outflows in the 27 EU member states were 30.3 billion euro, a number that included remittance flows both inside the bloc and to third countries.

Remittances to countries outside the EU remained unchanged compared to 2008 as a share of the total at 73 per cent, Eurostat said in a statement. In absolute terms, remittances to third countries stood at 22 billion euro in 2009.

Spain remained the single largest source of worker remittances – money sent by migrants to their country of origin – in the EU at 7.15 billion euro, down from 7.9 billion in 2008. Italy was second, narrowing the gap and reporting an increase in remittances to 6.75 billion euro, compared to 6.38 billion a year earlier.

France saw remittances shrink from 3.4 billion euro to 2.85 billion euro, while Germany (3.1 billion euro to three billion euro) and the Netherlands (1.56 billion euro to 1.5 billion euro), posted much smaller declines.

Outflows from Bulgaria fell from 23 million euro in 2008 (including nine million outside the bloc) to 10 million euro in 2009 (including four million outside the bloc).

Five countries – Denmark, Ireland, Luxembourg, Malta and Sweden – kept their remittances data confidential, but it was included Eurostat's final figure, the statistics bureau said. Data for the UK was not available and had to be estimated.

Remittances update

Officially recorded remittance flows to developing countries are estimated to increase by 6 percent to $325 billion in 2010. This marks a healthy recovery from a 5.5 percent decline registered in 2009. Remittance flows are expected to increase by 6.2 percent in 2011 and 8.1 percent in 2012, to reach $374 billion by 2012.

It should be noted that the World Bank’s definition of developing countries has changed. As an example Poland, which is estimated to have received $9.1 billion in 2010, is no longer classified as a developing country.

This outlook for remittance flows, however, is subject to the risks of a fragile global economic recovery, volatile currency and commodity price movements, and rising anti-immigration sentiment in many destination countries.

From a medium-term view, three major trends are apparent:

• a high level of unemployment in the migrant-receiving countries has prompted restrictions on new immigration; 
• the application of mobile phone technology for domestic remittances has failed to spread to cross-border remittances; and 
• developing countries are becoming more aware of the potential for leveraging remittances and diaspora wealth for raising development finance.