And compliance remains as important as ever
One of the most important sectors in the financial world is the remittance market. In 2022, global remittances totaled a staggering $830 billion, with a significant portion flowing from developed economies like the US to lower and middle-income countries (LMIC), mainly in Asia and the global south. In 2023, that value will likely grow to over $860 billion.
Personal vs Business Remittances
The remittances serve two main cohorts: individuals and businesses. Personal remittances often involve migrants sending money home, typically to the economies of developing nations. On the other hand, the resurgence of global trade has seen a growth in remittances by small to medium-sized enterprises (SME). These businesses, increasingly involved in international trade, rely on remittance services to pay for goods imported into the US.
Some of the Numbers, and Digital…
Delving a little deeper, the World Bank reports that of the expected $860+ billion value of global remittances in 2023, $669 billion of that will flowing to LMICs. The United States alone is projected to send out $306 billion in remittances.
As may be expected, digital platforms are growing in popularity. For individuals, there is no longer a need to rely solely on physical money transfer outlets. And banks and credit unions should be working hard to match the speed and convenience of challenger digital remittance services, especially for SME business customers.
According to Statista, the value of the digital remittances market will reach US$137.90 billion in 2023. That’s predicted to grow by 6.45% annually, resulting in a projected total value of US$177.10 billion by 2027. These substantial financial flows underscore the importance of robust and effective AML and CTF provisions for banks, credit unions, and remittance businesses. As digital remittances grow too, so does the demand for advanced, fast and reliable compliance solutions.
Compliance: A Critical Pillar in Remittance Services
Thus, banks, credit unions, and remittance companies are more than transaction facilitators. They are also gatekeepers against financial crime. Ensuring adherence to AML and CTF regulations is essential, not just for their own security but for the financial system generally. It’s here that Compli from Essiell Compli makes its mark, offering a suite of services designed for comprehensive regulatory compliance.
Compli is a game-changer for the financial services sector. It offers a robust structure that includes thorough checks for AML and CTF, alongside inbuilt behavioral monitoring to flag suspicious activities. This three-pronged approach promptly identifies and addresses questionable identities or behaviors. Moreover, Compli is uniquely customizable and scalable. Thus, it’s a perfect fit for rapidly growing remittance sector, including banks and credit unions simultaneously upgrading the offer to their SME customers. Its automated processes mean reliability and efficiency are at the forefront, providing exceptional cost-effectiveness.
Growth and Compliance Hand-in-Hand
As the market for remittances continues to grow, the need for stringent regulatory compliance becomes ever more critical. Compli from Essiell Compli stands out as a solution that not only addresses current compliance needs; it’s also ready for future opportunities in a sector that’s bound to keep on changing.
Sources:
World Bank , Dec. 18, 2023 / Statista May 2023 et al / The Street, Dec. 15 2023
