Taking advantage of new technologies for reducing remittance costs

Y. Sudhir Kumar ShettyPresident, UAE Exchange

International Conference, Global Migration Group27th May, 2015

Remittance and its fee• Over 230 million are migrants, sending home about $ 435 billion (2014 figures)• 7.8% is the current global average for remittance charges• G20 countries + World Bank target in the next 5 years = reduce it to 5%• UAE’s remittance fee is the lowest at 2%!

Remittance Super Tax

Remittance charges in Africa are the highest @ 14%. Eg: $200 is remitted for $25.

Super tax = $2.3 billion loss to Africa

Is there a solution?

• Investing in technology– World class and scalable– Speed– Systems & Controls (Compliance)– Productivity– Drive down costs

• Focusing on compliance• Technology usable by the customers

Opportunities

• Need for good infrastructure

• Initiation of large scale development across Gulf

• Lack of quality healthcare posed challenges

• Dr. B.R.Shetty identified the opportunity and started NMC Healthcare in 1975

• This brought in qualified medical personnel and better healthcare facilities

Challenges for the migrants

• Migrant population needed to send money home• Except banks, there weren’t many formal money transfer channels• Most low-earning migrants were unbanked. And banks discouraged low

ticket transfers.• Banks’ infrastructure wasn’t good and working hours were not

favourable• Banks wouldn’t work on weekly offs and public holidays.

Informal channels mushroomed• The only other option for migrants was to use unregulated means• Ignorance about the process made migrants more vulnerable• Hawala / Hundi thrived• Receiving economies didn’t get the advantage of the foreign exchange

Opportunity• Dr. B.R. Shetty, Founder NMC Group saw an opportunity here too =

UAE Exchange was born in 1980• UAE Exchange worked from 8:00 A.M. to 10:00 P.M., round the week• Branches spread across the region• Migrants’ accessibility improved

The Shift

• UAE Exchange encouraged migrants to choose formal means for sending money

• This brought forex into the receiving economy’s treasury.• Strong KYC and other measures assured compliance, earning trust

of people and regulators• Expanded branch network to improve customer proximity• Extended working hours

UAE Exchange Journey

1994 IT Dept

1996 Offshore Draft Printing

SWIFT

1998 Instant Money

Products WU + XM

2009 MasterCard

Tie Up

2009 / 2012 Smart Pay

Prepaid Payroll Card +

gocash Multicurrency prepaid Travel

Card

2009 ATM + Kiosk

Engines+ Online Money

Transfer

2010 FLASH Host to Host integrations

2013 Mobile App

FLASHremit Instant bank transfers

• Host to Host integration with Banks

• Sender gets SMS notification on credit

• Receiver gets SMS notification from correspondent bank on credit

• Turnaround time reduced to minutes and no follow up cost for customers

• Available in seven countries

MyBranch

• Kiosk Engine• Self-operated money transfer

kiosk• Kiosks made available in malls

and other public places• Empowering the customer to

transfer money independently• No manual intervention

In sync with technology

Money2anywhere.com• Secure online money transfer

portal• Anywhere money transfer

using credit / debit card or bank account

• Payout in Cash or into account• Quick turnaround time• Available in 10 countries• Launched portal for mobile

phones. www.money2anywhere.mobi

In sync with technology

Mobile Apps• Mobile Optimized websites• Content optimized for mobile

search• Informational Apps• Transactional Apps

Smart technology on cash payroll

• Securing and banking the wage cycle for Expatriate employees (who were exploited by employers and not given the promised pay.)

• Launched SMARTPAY card in 2010.• Technology-driven, MasterCard powered facility with online salary

loading facility + electronic payroll cards• Industry wide initiative in collaboration with the Wages Protection

System by the Central Bank of the UAE and the UAE Ministry of Labour

• Cash mode Card mode• Wage History and Spend History now available for the low wage

migrant

Aiming for Excellence

• Follows EFQM

• ISO certification for technology and environment

• DQA, DSES and SKEA

• Banker Middle East Product Award

• Asia’s Most Promising Brand Award

• Superbrand status for five years in a row

Beyond Business

• Enabled Bank Account Opening, contributing to Financial Inclusion(Over 4 mio people covered + 1 mio direct financial inclusions in the last 4 years !)

• Workshops to create awareness about financial planning(Pensions, Social Security, PDOs)

• Mission Zero Suicide (Counsel expatriates contemplating suicide due to financial issues)(Quick interventions to overcome failures to manage personal finances)

• Joining hands with UNICEF, UNWFP and other NGOs

• Partnering Embassies, Agencies to create awareness about financial planning and assistance in repatriation.

UAE Exchange at a glance

Over 7.9 million customers, worldwide

Contributes six per cent of the global

remittance volume

Correspondent relationship with

close to 150 banks

Servicing over 400,000 customers

everyday worldwide

31 Countries 750 direct offices =

Largest globally networked remittance

brands

New horizons

• Mobile Money Transfers

• Agency Model (MoneyBnet.com)

• Mobile money transfer units

• Online customer touch points

• Enhancing technological processes

• Empowering customer service with technology

Our quest continues

Our quest to reduce remittance cost will be successful only with active participation from service providers, technological innovators, respective regulators and governments.