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Remittances – a growth story

Explore the global remittance market, the UK's role, how remittances work, customer preferences, current trends, and the leadership of the UK Remittances Task Force. Discover the challenges and opportunities ahead.

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Remittances – a growth story

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  1. Remittances – a growth story Leon Isaacs Director Developing Markets Associates leon.isaacs@developingmarketsassociates.com 07909938305

  2. Contents • Global context • The UK • How remittances work • What does the customer actually want • Current trends • UK Remittances Task Force – leading the world • The future – challenges and opportunities Slide 2

  3. The Global Market • US $ 232 billion (source World Bank) • Growth rate 8% p.a. • North – South flows 36% • South-South flows – 30% • Migration is the key driver – 191 million (source UN)

  4. Recorded remittances FDI Private debt and portfolio equity ODA Source World Bank GEP 2006 The importance of remittances can not be underestimated

  5. The UK - Migrants • 2001 Census data • 4,301,280 born overseas • 12% North West/Yorks • 21% Midlands/East England • 54% London and South East • 13% Rest

  6. Where were the migrants born? ‘000 people

  7. Where the money goes 4 5 1 2 3 1 Estimated £2.3 billion Slide 7

  8. How remittances work Slide 8

  9. What senders want • Security • Price • Fair • Transparent • Certain • Convenience • Close to location • Opening hours • Ease of making transaction • Speed/certainty • Quick • Time known guaranteed Slide 9

  10. Global trends • Massive interest from Governments and development organisations • Increased regulation • Consolidation among money transfer companies • Greater interest from banks • Technology beginning to impact • Good news – prices are beginning to fall Slide 10

  11. UKRTF – leading the world Private sector driven, but with public sector funding. OBJECTIVES: • Greater transparency in the UK remittances market • More competitive remittance markets • Better informed remittance consumers • Greater use of formal (versus unlicensed) money transfer channels • Reduced financial exclusion (in both UK and developing countries) • Better information for government and providers • More streamlined and better coordinated regulation of money transfers Slide 11

  12. UKRTF – current projects • Further research – focused on informal sector • Regulation – understanding and influencing policy and uniting the industry • Improving the availability of information for consumers • To comply with regulations • To provide a customer focused standard • Website • Support for smaller MTOs • Implementation of a customer charter Slide 12

  13. Challenges • How to deliver the positive aspects of informal remittances in the regulated market • Inclusion of remittances in the financial system • Continue to provide consumers with the information that they need to make the right choice • Change the focus from the method of transfer to what the funds are used for when they arrive Slide 13

  14. Mid-term report on the industry Making progress but could do better Slide 14

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