From the Front Lobby to the Back Office

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From the Front Lobby to the Back Office Building a Successful Remittance Program The Payments Institute Atlanta, GA July 30, 2008

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Agenda Understanding the Global Remittance Market Remittances and Financial Institutions Is your Bank or Credit Union Immigrant Friendly? Guaranteeing Success Take-Home Tips/Other Resources

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Remittances to Developing Countries - $301 billion USD 150 million outsiders overall sent US$301 billion in settlements in 2006

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World Migration and Remittance Facts United States Top goal nation for wanderers - 38.4 million Top settlement sending nation - $42.2 billion USD Accounts for 1/3 of overall settlement streams Top relocation hallways including US (*Top ten) Mexico* (10.3M); Philippines* (1.6M); Germany (1.4M); India (1.1M); China (1.1M); Vietnam (1.1M); Canada (1M) Top settlement getting nations India ($27B); China ($25.7B); Mexico ($25B); Philippines ($17B) Sources: World Bank (Migration information 2005; settlement information 2006); Citigroup

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Remittance Flows – Africa Remittances to Africa totaled $38.9 billion in 2006 The main five beneficiary nations are Morocco, Algeria, Nigeria, Egypt and Tunisia Migration is dominatingly intra-local with huge universal movement to previous European frontier controls The US is additionally a noteworthy transient goal, with the larger part originating from Nigeria and Ghana

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Remittance Flows – Asia and Oceania get $113.9 billion in settlements every year, making it the biggest local beneficiary on the planet India, China and the Philippines are the main three beneficiaries of settlements in the district US to Asia settlements = $24B in 2006 Main goals for vagrants are the US, Russian Federation, and New Zealand Significant intra-provincial relocation to Australia, China, Japan and Singapore The US is among the primary transient goals for Filipinos specifically

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Remittance Flows – Latin America Mexico $24.3 billion Almost $68B in 2006 Mexico is the biggest beneficiary at $24.3B or 36% of all exchanges to Latin America & Caribbean US has verifiably been fundamental goal for Latin American vagrants Increased relocation to Europe (for the most part Italy & Spain) and intra-territorial movement is evolving pattern

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Focus on US-to-Mexico Remittances Item information is assessed in light of normal estimation of $350 per settlement

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What's driving settlements? Globalization and portability of work Transnational ties "Protection" – in the event of product disappointment, regular debacle, work loss of other relatives, and so forth. Occasion endowments (Mother's Day) Ease of correspondences brings desires and a feeling of commitment

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Who are the remitters? As indicated by a Pew Hispanic Center review of Latino remitters: Nearly 50% of those conceived outside the US send cash routinely 43% don't have a financial balance Average remitter puts in 13 years in the US 63% sit in front of the TV, listen to radio predominately in Spanish 3 out of 5 are male with a normal age of 37 59% did not finish secondary school 57% make under $30,000/year Most of those utilized are untalented workers

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Sizing your Market US Census Hispanic populace information - County-by-region take a gander at Hispanic populace Data does not demonstrate Mexican populace alone, but instead Hispanic populace when all is said in done Migrant passageways People from a specific group in the nation of origin emigrate to a particular range in the US Talk to government offices or offices, temples and group associations in your general vicinity

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Hispanic Population Projections

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Hispanic Market Potential Census Data Example – St. Louis County, MO 19,364 Hispanic occupants in 2006 Nearly 2% of aggregate populace in 2006 34% of Hispanic populace is age 20-39 68% is of working age (15-64) Hispanic populace grew 30.5% from 2000-2006 Total populace declined 1.6%.

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1,020,000 20,000 19,000 1,015,000 18,000 1,010,000 17,000 Total populace Hispanic populace 1,005,000 16,000 1,000,000 15,000 995,000 14,000 2000 2001 2002 2003 2004 2005 2006 Year Total pop Hisp pop Hispanic Growth Compared to Total Growth

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Agenda Understanding the Global Remittance Market Remittances and Financial Institutions Is your Bank or Credit Union Immigrant Friendly? Guaranteeing Success Take-Home Tips/Other Resources

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Remitters as Financial Institution Customers - Challenges Potential clients may be unbanked Lack of conventional documentation Special showcasing and client benefit needs Language boundary Hours of operation sometimes fall short for worker populace's needs Money exchange organizations overwhelm settlement advertise Estimates of settlements sent through banks change from 5% to 19% of exchanges

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Remitters as Financial Institution Customers - Opportunities US Hispanic buying influence - $870 billion in 2008; $1.3 trillion by 2015* Hispanic development rate is three times the national rate 59% of Hispanic grown-ups have a phone phone** Remitters require expansive scope of budgetary administrations Building hinders for client accomplishment, maintenance and cross-offering Strong client steadfastness Possible Community Reinvestment Act (CRA) credit for offering settlements Sources: * (Research and Markets report); **Pew Internet and American Life Project

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Remittances 101 Types and elements of settlement administrations Cash-to-money Predominant purchaser inclination More helpful yet more exorbitant Account-to-record Supports monetary consideration on both finishes of exchange Typically a lower-cost alternative than different sorts Account-to-money/Cash-to-record Flexible to oblige absence of record on either side of the exchange Web choices PayPal and Xoom ATM and prepaid cards Flexible to suit more prominent access to monetary administrations

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Remittances 101 Key cost drivers Upfront capital expense – programming, innovation, execution and client benefit Build versus purchase Marketing costs As brand gets set up, promoting center movements from client procurement to maintenance Loyalty and maintenance programs Variable costs Transaction start, client ID confirmation, dispersion costs, center FX costs Ongoing bolster costs Technology, item improvements, server farm and program administration Source: Citigroup

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Remittances 101 Understanding charges & remote trade Pricing changes altogether by administration, circulation organize, sort of item and goal nation Costs Remittance expenses for sending and potentially to pay out Exchange rate spread Difference between outside swapping scale at which settlement supplier purchases coin and retail conversion scale connected to sender's exchange Can be a shrouded charge to the recipient

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Offer the Right Mix of Products and Services Low-cost check getting the money for and cash arranges as transitional administrations Accounts that don't require high opening parities or high charges Low least adjust reserve funds alternatives Credit-building items Remittances are a basic piece of arrangement of items See Appleseed examine on Banking in a Global Market

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Compliance and Remittances Bank Secrecy Act Prevents budgetary organizations from being utilized as go-betweens for criminal action Reporting and record-keeping prerequisites USA Patriot Act Requires Customer Identification Program Section 326 records types of adequate recognizable proof Supports FIs' capacity to offer record to non-US residents Office of Foreign Assets Control (OFAC) Requires that universal things be screened against the Specially Designated Nationals (SDN) List FIs must have a composed methodology for consenting to OFAC directions

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Agenda Understanding the Global Remittance Market Remittances and Financial Institutions Is Your Bank or Credit Union Immigrant Friendly? Guaranteeing Success Take-Home Tips/Other Resources

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Front Lobby Tips Adapt to serve unbanked and transient buyers' money related administration needs Financial training is imperative Need to change client conduct in two nations Reach out to migrant groups to grow new client connections Consider more helpful branch areas and hours Offer more than one sort of settlement item to address the issues of all clients

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Back Office Tips Determine vital installment data to gather from clients as per start and consistence hones If utilizing ACH, confirm that product obliges cross-outskirt ACH designs (SEC codes CBR/PBR) Be prepared for new cross-fringe IAT arrange in March 2009 Pre-fill beginning structures for front anteroom to streamline required and dull data

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Integrating the Remittance Service to Your Environment "Settlement corner" Separate space committed to settlement benefits No sitting tight when all is said in done teller line for remitters Efficient frameworks for rehash clients Placards publicizing trade rates Signage coordinating clients Se habla espa ñol Community outreach Make individuals mindful of administrations offered

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Agenda Understanding the Global Remittance Market Remittances and Financial Institutions Is your Bank or Credit Union Immigrant Friendly? Guaranteeing Success Take-Home Tips/Other Resources

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Business Plan and Goal Setting Remittances are a critical part of general business development procedure Determine your target in offering settlements Transactional versus social Be reasonable about your objectives Number of exchanges, new records, advances, and so on. Cross-offering, up-offering Generally not an overnight achievement

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Staffing/Staff Education Foreign dialect talking staff Puts settler clients calm Creates client inclination and dedication Educate all staff on administration highlights and social contrasts Offer representative motivating forces to expand settlement volumes

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Smart Marketing and Outreach Efforts Target showcasing to the