How to offer cost-effective remittance to your customers as a bank 

Remittances—money sent by people working in one country to their family or friends in another. This remittance plays a very important role in the economies of many low-income and developing countries. 

There are about 200 million migrants who send money home regularly. In 2018, migrant workers sent a staggering $689 billion USD globally. That year, cross-border payments totaled $124 trillion USD. 

According to the World Bank, digital cross-border remittances are expected to grow from $295 billion in 2021 to $428 billion by 2025. As a bank, offering cost-effective remittance services not only supports your customers but also strengthens your position in the competitive financial market. 

Traditional remittance services often have high fees and take a long time, which makes customers seek alternatives. To stay ahead and keep your customers happy, banks must innovate and provide efficient, affordable, and secure cross-border remittance solution 

This comprehensive guide will take you through various strategies that banks can adopt to offer cost-effective remittance services, ensuring both customer satisfaction and operational efficiency.

So let's begin!

How Banks Can Offer Cost-Effective Remittance Services

1. Use Digital Channels

Invest in digital and mobile solutions to make remittance services more accessible and cost-effective. Digital transfers usually cost less than traditional methods. 

You can offer:

• Online Platforms: Let customers send money from the comfort of their homes.

• Mobile Apps: Allow transfers directly from a mobile phone, making the process faster and more convenient.

2. Invest in Technology and Collaboration 

Investing in advanced technology and collaborating with money transfer operators can reduce costs and improve service efficiency:

• Core Banking Software: Invest in robust IT systems to handle transactions securely and efficiently.

• Partner with Financial Institutions: Collaborate with banks and payment service providers to expand your reach and offer competitive rates. You can work with international banks and financial companies to negotiate lower fees for international money transfers. Giving these savings to customers can make your service more appealing.

3. Focus on Compliance

To build trust and avoid legal problems, make sure you follow the rules:

• Anti-Money Laundering (AML): Set up strict AML procedures to stop illegal activities.

• Know Your Customer (KYC): Verify your customers’ identity to comply with legal standards.

• Currency Transaction Reports (CTR): Reporting big transactions to the authorities.

• Licensing: Obtain necessary licences for operating remittance services in various regions.

Keeping up with these rules and regulations helps you avoid fines and ensures everything runs smoothly.

4. Define Your Unique Selling Proposition (USP)

Find out what makes your remittance service stand out. This could be things like:

• Lower fees

• Faster transfers

• Multiple transfer options

• Better customer service

Understanding your target audience will help shape your services to fit their needs.

5. Offer Competitive Pricing

To offer cost-effective remittance services, offer:

• Transparent Fee Structures: Make sure your customers understand the costs involved. Be clear about all fees involved in sending money. Being honest about costs builds trust and helps customers understand the true cost of remittance services.

• Fair Exchange Rates: Offer good exchange rates to get more customers. The exchange rate can significantly affect the amount received by the recipient.

• Special Deals: Offer lower rates for loyal customers or higher transfer amounts. High fees can discourage customers from using your service.

6. Educate Customers

Provide information and resources to help your customers understand the most cost-effective ways to send money. This could include: 

• Clear Instructions: Provide easy-to-follow guides for using your remittance services. Make sure your customers can easily and quickly navigate and complete transactions.

• Customer Support: Offer excellent support to help customers with any issues they might face. You can employ automated chatbots that can be used for immediate support.

Benefits of Offering Cost-Effective Remittance

• Increased Customer Base: When banks offer cost-effective remittance services, they can get more customers, including migrant workers and expatriates.

• Higher Transaction Volumes: Lower costs can lead to higher transaction volumes, which will ultimately increase overall revenue.

• Customer Loyalty: Providing reliable and cost-effective services can boost customer loyalty and lead to repeat business.

Bottom Line 

By adopting digital solutions, partnering with ideal FinTech companies, banks can provide cost-effective remittance services. This not only supports your customers but also strengthens your bank's position in the competitive financial market.

By implementing above mentioned strategies, your bank can reduce the financial burden on those who rely on remittances. This also helps the world's economy grow better. Plus, it brings in more customers and enhances their satisfaction and loyalty.

DigiPay.Guru is a globally recognized fintech solution provider that offers advanced digital payment solutions to banks, fintechs, financial institutions, NBFCs, and businesses. Our comprehensive suite called DG Bank provides products and services such as Mobile Money,  Agency Banking, International Remittance, eKYC, Prepaid Cards, Merchant Acquiring, and Scan & Thru.

We help businesses design solutions to revolutionize financial markets by building mature, flexible, customizable, and future-proof digital platforms. Our solutions are available in both “License Version” and “SaaS Model”.