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Don’t Get Left Behind: Why Scalable Compliance is Key for Remittance Providers

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The financial services sector is heavily regulated, and compliance demands can be a burden for businesses of all sizes. Remittance providers, also known as money transfer businesses (MTBs), are no exception. Know Your Customer (KYC) checks, anti-money laundering (AML), counter-terrorism financing (CTF) measures, and sanctions lists are just some of the hurdles that MTBs must deal with as a matter of routine.

Is Your Compliance Provision Up to the Task?

While some might view KYC as a one-off task, it’s an ongoing process. Customer due diligence needs to be revisited regularly, and transactions must be monitored continuously to build an accurate picture of typical behaviours and identify suspicious activity.

Because of the scope of effective compliance, many MTBs rely on third-party compliance services. This is a sensible choice, given the high cost of developing and maintaining in-house solutions. However, choosing the right partner is crucial. It’s not enough to simply automate compliance tasks. Effective compliance services must be user-friendly, adaptable, and – most importantly in today’s expanding market – scalable.

Prepare for Growth in the Remittance Market

A recent study by Juniper Research, a leading authority on payment markets, adds credence to this point. The study predicts a 41% global increase in the value of digital money transfer and remittance transactions over the next four years, reaching $6.5 trillion by 2028 . Growth will be fueled by the rising adoption of mobile money solutions in developing regions, and the popularity of instant payments in developed markets.

With many developed economies hosting migrant workers, this growth will be a surge in demand for remittance services. Established players will take up some of the slack, but there’s also ample opportunity for smaller operators and startups to thrive, including in the UK.

Responding to Demand at Many Levels

For these businesses, scaling their compliance operations efficiently will be paramount. Failure to do so will hinder their ability to serve new customers and could, potentially, lead to regulatory sanctions. The recent Juniper Research study highlights the dominance of established brands like Huawei, Visa, and Mastercard in the money transfer space. However, the same report emphasizes the importance of adopting a Payment-as-a-Service (PaaS) model for future success. This means offering solutions that can integrate seamlessly with third-party platforms and applications.

When it comes to compliance, scalability translates to several key benefits for remittance providers:

  • Customization: A scalable compliance solution should allow for customization to meet the specific needs of each business.
  • Elasticity: The system should be able to handle fluctuations in customer volume without compromising performance.
  • Streamlined onboarding: New customers can be brought on board quickly and efficiently, even during periods of rapid growth.
  • Continuous monitoring: Transaction monitoring should be able to adapt to accommodate new data sources and behavioural patterns.

Choose Your Compliance Partner According to Future Need

For an example of a service which delivers scalable compliance solutions and more, why not have a look at Compli, from Essiell Compli? It’s a comprehensive and highly effective service that delivers reliable, customizable and scalable compliance services. It’s compatible with MTBs of any size and remains consistently cost effective.

By choosing a scalable compliance service, remittance providers can ensure they are equipped to handle growth while adhering to the strictest regulatory requirements. Then they can focus on what they do best: providing fast, secure, and efficient money transfer services to their customers.

By Declan Morton, staff writer at Essiell Compli


For reference: Juniper Research: Digital Money Transfer Market: Huawei and Visa Revealed as Leaders in New Competitor Leaderboard, Yahoo! Finance, 15th April 2024.

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