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WSBI and ESBG

Leveraging on remittances to expandaccess to finance

Norbert BielefeldCape Town – 9 April 2009

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ESBG - WSBI: a brief introduction

Americas:16 Members from

13 countries

Interest representation, business co-operation and technical assistancefor 103 Members in 89 countries focused on retail, regional andresponsible banking – Total assets 8,080 billion EUR – Total number of

accounts: 1,2 billion

Europe:34 Members from

30 countries

Asia-Pacific:22 Members from

17 countries

Africa:31 Members from29 countries

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Our vision for remittances

“The impact of remittances on economic development will increase if we promote closer relationships between

recipient institutions, migrants and sending institutions.At macro-economic level a migration from mostly cash-

based remittance services to account-to-account services will lead to a fuller inclusion of the huge remittance flows into the balance of payments of

recipient countries and the balance sheets of recipient financial institutions ”.

(WSBI Press release, 23 August 2006)

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There is more to remittances than a transaction!

Capitalising on the strength of links between country of origin andcountry of immigration:

UM= f (C,S,R, SC Imm, SC Emi, C Hh-Emi , InfComEmi )

Y(SC Imm)= C + S + R

Source: K. Maggard – Fed. of Atlanta – WP 2004-29

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Positioning in remittances

Objective: to increase bancarization, and balances held onaccounts

Focus: fostering capabilities to provide remittance services inthe account-to-account space

To be integrated by our Members into banking and financialproducts offerings

However – as cash plays an important role - the cash-to-cash

segment needs to be supported as well

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Examples

Spain: allow both customers and non-customers to access card-based transfer products over in particular an ATM network. Offerof personal, mortgage loans and micro credits in co-operationwith correspondents

United Kingdom: India Banking Service deployed in a specificnumber of branches with dedicated staff and marketing andsales material. Account-based money transfers to dedicatedpartner bank in India.

Brazil: internet money transfer service for migrant Braziliansbased on a host country issued credit card, as well as servicesthru physical tellers at partner banks

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The 3 Components of our Remittances Initiative

1- Commitment by WSBI Members to offer remittance services thatcomply (at minimum) with a common “Fair Value RemittancesValue Proposition”

2- WSBI’s support to Members to research and facilitate technologysolutions and co-operation agreements with solution providers

3- WSBI’s support to Members to act to remove identified legislative

and/or supervisory obstacles

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Obstacles: first mile

Remittances: repeat transactions between known pairs oforiginators and beneficiaries

Informal systems can only be challenged by legislative andregulatory dispositions that are proportionate to this market

Disincentivise neither migrants nor originating institutions!

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Obstacles: intermediation

Standardisation: certainly, but: what governance, what pace

Payment infrastructures: certainty is a progress, but accessmust remain affordable

Consolidation of a 2-tier market

Tolerance of exclusivity arrangements

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Obstacles: last mile

Long term approach

Promote an “account holding friendly” environment and culture

Leverage reach: focus on trust and stability, yet ensure that allinstitutions can access payment networks and systems, andoffer core products

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To leverage remittances andexpand access to finance

Keep legislation proportionate

Allow migrants to use – rather than bypass – payment andbanking systems

Be vigilant on competition conditions

Remain technology neutral – yet continuously assess risks

Enhance governance and trust in financial system