Citibank’s experience serving the unbanked and under-banked through retail remittance services

Remittances represent an important link between migrants and their communities at home, by providing beneficiaries in many countries a regular and dependable flow of financial support. Of remittances sent through formal channels, the majority are sent through money transfer operators (MTOs) such as Western Union, MoneyGram or post offices, and a smaller part through banks. Banks have now entered the remittance market, but only about 5 per cent of remittances were sent through this channel in 2004 (GAO 2005), though the percentage may now be higher. However, banks are additional channels for migrants to send and receive remittances and can help promote the development impact of these funds by increasing access to more financial products and financial literacy. Given the growing and significant volume of remittances (despite some decline because of the global economic recession), banks have an opportunity to offer more choices for remittance customers and to gain a larger share of the market, reduce transaction costs and further link diasporas with development.

Related Subject(s): Migration