Of Migrants & Money Matters: From Migrant Remittance Transfers to Migrant Banking
This paper reviews the migrant remittances market, examines developments in migrant banking and lists factors contributing to policy agendas and industry developments.
The role of migrant remittances in terrorist financing became the centre of policy debates and concerns following terrorist attacks in the USA in 2001. Further, remittances as a medium for financial inclusion has become a central topic in the financial services industry. Although Money Transfer Operators (MTOs) have traditionally dominated the remittances sector, several banks now offer migrant banking services.
The paper states that banks and post offices have a higher share than MTOs in the global remittance market. Many migrants, however, still favor MTOs for their accessibility, visibility and single product focus. The paper identifies the following contributing factors to recent market developments:
- Growing migrant population;
- Greater awareness of remittance flows;
- Increased regulation and regulatory oversights for MTOs;
- Increased competition, especially in key remittance corridors.
