In a new report, Global Money Transfers:
Getting The Formula Right When High-Tech Meets High-Touch, Celent
provides an assessment of the current remittance market landscape. The
report examines a new paradigm emerging in the marketplace whereby
"sponsor banks" are teaming up with card processors and
distribution companies to overcome traditional barriers to entry: large
origination and distribution networks, scalable technology platforms, and
stringent compliance issues. The emerging models come from both public and
private companies that will take a best-of -breed approach to money
transfer, partnering with specific banks, processors, and distributors to
ensure that critical requirements of their business are met. ATM card/POS
terminal processing, Office of Foreign Asset Control (OFAC) guidelines,
stored value card compliance, and agent distribution can all be handled by
a set of partners. This will allow entrants to conduct large-scale
competition without highly capital-intensive investments.
Celent finds that while there will be downward
pressure on pricing due through increased competition and bundling of
products and services, the money transfer market will remain profitable
due to its sheer size and fragmentation. The remittance market should grow
from US$256 billion in 2005 to US$281 billion in 2006 while flows from
unlicensed entities continue to decrease due to increased regulatory
scrutiny.
"This year, we will see entrants with a
combination of business processes, local distribution, and new technology
that should finally bridge the "high-tech, high-touch" divide in
the marketplace and win with the right formula," comments Dan
Schatt, a senior analyst in Celent’s banking group and author of
the report.
The report finds that there is a growing divergence
of opinion in the US marketplace over how best to reach remitters. The
high-tech camp emphasizes technology and price as a primary consumer
decision factor, while institutions in the high-touch camp emphasize
ongoing personalized contact and rely primarily on walk-in traffic to
their agent locations.
The 43-page report contains 18 figures and three
tables. A table of contents is
available online.
