The scenario of transferring money isn’t what it used to be. It is very different from the initial days. Now it is with only a few taps delivering cash into the family’s hands by avoiding any queues. Digital banks have evolved, enabling you to open a bank account from the touch of the button all from your phone. When these two financial technology revolutions combined, they could lead to the future of both.
Could Digital Remittances Adopt the Unbanked?
In many countries worldwide, including the United States, underbanked citizens are surprisingly high. Therefore, the unbanked rate for the US is over 6%, followed by Egypt, the Philippines, Mexico, China and consecutively India.
According to a research, countries that receive large amounts of remittances have large unbanked populations. Internet and mobile phone has been the backbone for growing digital remittance infrastructures. Unfortunately, traditional banking and remittance infrastructures have concluded their expansions and are no longer accessible for various reasons.
Emerging companies are striving to bridge the gap between online money transfers and digital banking services to customers. Coupling the services can reduce the customers’ reliability on numerous products to receive and store money. Now, the transaction takes place even without having had a traditional bank account at a bricks-and-mortar bank.
Future Of Digital Remittances
Although we have discussed the bank’s upcoming replacement, what shape will the future of digital remittances and banks take? According to the report, hyper-personalisation is imperative, not an option, in a digital economy”. Thus the blending of smart devices r esults in evolving CX (customer service) capabilities and real-time processing of big data. It means that new opportunities stand for banks to meet customers’ needs on highly personalised.
In a Visa Economic Empowerment Institute report, the payment giant emphasised the benefits of digital remittances. At first, when MTO entered with digital features and low fixed costs, it spurred competition and elevated intense digitisation efforts by the established firms. Digital remittances also serve outside the traditional correspondent banking system by taking profit from new global networks that offer fewer ‘handoffs’, better transparency, faster transfers, and lower costs. While digital remittance companies carve out a larger market share for themselves and start to specialise in specific clientele to help highlight their individuality from the competition.
Where Does The Industry Go From Here?
Digital remittance companies are gradually shifting to remittance to enfold banking services. On the positive side, World Bank reports remittances to continue to rise after a positive rebound following COVID-19-related pullbacks. Hence it would be no surprise if digital remittance companies continue to expand their services on a hyper-personalised level.
Customers existing in unbanked and underbanked nations, for them hyper-personalisation of remittances will inevitably incorporate banking options. Furthermore, it gives peace of mind reduces to customers to start their financial journey. Companies emerging at the forefront of the digital finance revolution might answer the pleas for help from the billions of unbanked citizens globally.
Constructing a successful partnership is not easy, particularly in the financial services sector. According to the World Fintech Report 2018, successful collaboration between financial institutions will heavily rely on traditional institutions. It can identify and assess partnerships possessing four pillars: people, finance, business, and technology. Furthermore, regulation has a crucial role to play in ushering in this new era of collaboration.
Digital services can throw off the shackles of the real world. The advantage of these services isn’t restricted to opening physical branches for expansion. Instead, digital services can shape and mold themselves to fit their customers’ niche needs, which excel past their physical counterparts. ATL Money is becoming the future bank of tomorrow because it is a leading money transfer service provider. It solves the problem for unbanked people with extra add on features. Hence why wait for more and start transferring money with us.