WSBI and ESBG

Leveraging on remittances to expand

access to finance

Norbert Bielefeld
Cape Town – 9 April 2009
 ESBG - WSBI: a brief introduction

Europe: Asia-Pacific:
34 Members from 22 Members from
30 countries 17 countries

Americas: Africa:
16 Members from 31 Members from
13 countries 29 countries

Interest representation, business co-operation and technical assistance

for 103 Members in 89 countries focused on retail, regional and
responsible banking – Total assets 8,080 billion EUR – Total number of
accounts: 1,2 billion
 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)

There is more to remittances than a transaction!

Capitalising on the strength of links between country of origin and

country of immigration:

UM= f (C,S,R, SCImm, SCEmi, CHh-Emi, InfComEmi)

Y(SCImm)= C + S + R

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

 Positioning in remittances

 Objective: to increase bancarization, and balances held on

accounts
 Focus: fostering capabilities to provide remittance services in
the account-to-account space
 To be integrated by our Members into banking and financial
products offerings
 However – as cash plays an important role - the cash-to-cash
segment needs to be supported as well
 Examples

 Spain: allow both customers and non-customers to access card-

based transfer products over in particular an ATM network. Offer
of personal, mortgage loans and micro credits in co-operation
with correspondents
 United Kingdom: India Banking Service deployed in a specific
number of branches with dedicated staff and marketing and
sales material. Account-based money transfers to dedicated
partner bank in India.
 Brazil: internet money transfer service for migrant Brazilians
based on a host country issued credit card, as well as services
thru physical tellers at partner banks
The 3 Components of our Remittances Initiative

1- Commitment by WSBI Members to offer remittance services that

comply (at minimum) with a common “Fair Value Remittances
Value Proposition”

2- WSBI’s support to Members to research and facilitate technology

solutions and co-operation agreements with solution providers

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

and/or supervisory obstacles
Obstacles to leveraging remittances: well known,
but high on whose agenda?

 First mile: enable immigrants access to affordable payments

and banking

 Intermediation: access to products, alliances, low cost

infrastructures, global reach, exclusivity arrangements etc. for
service providers

 Last mile: develop access and choice in rural areas, incl.

support of non-cash payments, longer term access to financial
services
 Obstacles: first mile

 Remittances: repeat transactions between known pairs of

originators and beneficiaries

 Informal systems can only be challenged by legislative and

regulatory dispositions that are proportionate to this market

 Disincentivise neither migrants nor originating institutions!

 Obstacles: intermediation

 Standardisation: certainly, but: what governance, what pace

 Payment infrastructures: certainty is a progress, but access

must remain affordable

 Consolidation of a 2-tier market

 Tolerance of exclusivity arrangements

 Obstacles: last mile

 Long term approach

 Promote an “account holding friendly” environment and culture

 Leverage reach: focus on trust and stability, yet ensure that all
institutions can access payment networks and systems, and
offer core products
 To leverage remittances and
expand access to finance

 Keep legislation proportionate

 Allow migrants to use – rather than bypass – payment and

banking systems

 Be vigilant on competition conditions

 Remain technology neutral – yet continuously assess risks

 Enhance governance and trust in financial system