By Felipe Buckup
In my global money movement career, I have seen the landscape transform immensely. The market of today is a dynamic ecosystem, with new players, new integrated models and new ways of doing business.
Most of this transformation can be attributed to the changing demands of digital-driven customers and the introduction of more technology-focused solutions. As a result, financial services firms are thinking more like technology companies and vice versa.
The need to move money seamlessly across currencies and borders has never been more relevant to more kinds of people and to more businesses than it is today. As I look towards the future, here are my predictions for the biggest trends in the cross-border money transfer payment landscape:
Account-to-account (A2A) transfers on the rise
In the past few years usage of A2A transfers has risen sharply in the money movement space, a trend augmented by the industry’s digital transformation and the host of options available to consumers. However, in many cases, large amounts are restricted from being sent, meaning that consumers are still required to send wire transfers across the globe. To help eliminate this cumbersome step, service providers will be forced to find new and inventive ways to serve high-value transfers.
Digital-first solutions continue to explode
While retail senders are migrating to digital options, it is more important than ever for established companies to scale up their digital offerings to ultimately meet consumer demand. At Western Union, we’ve seen immense digital penetration and transaction increases: a trend that has coincided with our massive digital transformation into one of the largest digital money transfer firms in the world. Globally, our digital transaction revenue grew by 22 per cent in Q2 2018.
Collaborations will be key
Dozens of start-ups have been launched in the last several years touting faster and cheaper ways to send money abroad. However, while these new businesses and new technologies get a lot of attention for potentially being financial services disruptors, many innovations are coming from interesting collaborations and integrations.
For example, as money transfers between friends and family can be innately social experiences, we’ve aligned globally with Facebook, Viber and WeChat to offer money transfer functionality through existing instant messaging platforms. Other small industry players are teaming up with larger ones to gain access to new markets, customers and technologies. There likely will be more interesting combinations of integrated collaborations on the horizon across the industry.
Merging the virtual with a human touch
While customers are trending towards a digital-first attitude, the international money transfer landscape still benefits from an omnichannel presence. This is much like the changing nature of the retail landscape, with companies such as Apple and Microsoft investing in physical storefronts to extend their platforms.
The combination of online and retail enables people and businesses to send and receive money across a full spectrum of uses and needs. The ubiquity and reach of your platform will continue to be a crucial need in a changing landscape.
To summarize, changes to the remittance industry are happening rapidly. As I look towards the future, I am passionate about the potential of this space. Money transfers power our economic prosperity and enable our global transformation to a borderless future. When money moves, good things happen. And there are many good things to come.
Felipe Buckup is vice president and general manager, Western Union Canada.