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How consumer behaviour shapes trends within the remittance industry

Customer experience is fundamental to the payments industry and when it comes to the remittance industry, most senders and receivers attach an emotional quotient to the transfer of funds. Unlike payments, where money is exchanged for a service or product, remittances are usually personal and emotional transactions. Remitters send money to their home countries to support their loved ones and will therefore have strong feelings about the speed, convenience, cost, transparency and security of a transfer service. When that service doesn’t measure up, they will look for an alternative provider who can meet their remittance requirements.

Across all industries, but especially within financial services, customer expectations are being driven by technology. Digital transformation is profoundly affecting international transfers and with the exponential growth of smart phones and the connectivity they provide, remitters are looking for new and more convenient ways to make regular transfers. While there is no end to the debate on whether consumer demand shaped technological progress or did technological advancement shape the consumer’s demand? In my opinion there is no right or wrong answer to this. An overview of today’s marketplace makes it evident that businesses must provide digital parity. For business this translates to offering customers the same level of ease and advantage that they experience elsewhere in their increasingly connected and mobile lives.

Previously customer stickiness towards financial services providers was high however over the years technology has widened and levelled the playing field. Thanks to the rise of international money transfer organisations, which connect corridors worldwide with the latest technology, remitters have plenty of options to choose from when it comes to transferring funds. In this sense, money transfer has become a buyer’s market. As providers offer versatile and cost-efficient services, customers are on the look-out to find the best deals. 

Alongside the impact of digital technology and the widespread adoption of smartphones, the remittance industry is also evolving basis the behaviour of digitally-savvy millennial consumers. Millennial consumers are quicker to switch allegiance when services fail to match their tastes and preferences. The fact that millennial customers and their preferences are driving change and fuelling greater competition cannot be overlooked. To this end money transfer organisations must focus on forming partnerships with fintechs and other third parties who can promise innovation.

In the age of e-commerce and now m-commerce, customers expect their money transfer experience to be as seamless as their other digital interactions. There is a need for instant that offer control, oversight, flexibility and convenience. Anything less is just not going to cut it.

Rise in migration is directly proportional to the burgeoning of the remittance market. This is another development shaping the industry, hence not only must money transfer organisations follow the technology curve and meet the needs of digital age consumer but also expand their services to connect more people with more regions.

In common with other financial services, the remittance industry must use technology to expand and refine the primary service. As well as focusing on the areas that remitters value most – cost, convenience, speed, and safety – money transfer organisations must look at other ways to meet customer expectations. Increasingly that means exploring money management services that could add value to pure transactions.

The providers that use technology to meet evolving customer expectations and develop stronger relationships are the ones that stand to gain the most. Cost will always be a key consideration for anyone sending money home, but today’s customers expect more for their money in ways that go beyond the obvious. 

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Sudhesh Giriyan

Sudhesh Giriyan

CEO

Xpress Money

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25 Oct 2017

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London

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This post is from a series of posts in the group:

Trends in Financial Services

A community to discuss the future of financial services and any other interesting trends, strategies, ideas, views.


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