Challenges and Opportunities for Banking Remittances: Key Elements Needed to Develop a Strategy to Bank Recipients of Remittances

This InSight presents opportunities and challenges that ACCION International has identified in households that receive remittances. It makes recommendations that financial institutions should take into account when developing an effective strategy to serve recipients of remittances.

Access to financial services can help both, immigrants and recipient households, by increasing options available for remittance use. Banking services can give these families financial tools to help them achieve their goals of improved economic well-being. In order to effectively serve recipient households, banks should:

• Assess differences in migration flows and remittance types, and their impact;
• Assess banking potential of various market segments;
• Adapt existing financial products to meet recipients’ specific needs;
• Develop an effective communications and marketing strategy;
• Develop financial literacy tools to increase recipient’s access to information;
• Establish partnerships with money transfer companies or banks, and facilitate linkages with financial services.

Finally, there is significant room for product innovation, synergies and new partnerships between different actors across different regions in the world. The common objective should be to leverage technology and develop innovative financial solutions that can respond effectively to immigrant and recipient needs.