Remittances, or money sent by immigrants to their families residing in their native countries remain a key source of external resource flows for developing countries, far exceeding official development assistance, and more stable than private debt and portfolio equity flows. The majority of this money comes from the GCC — the world’s largest remittance market. In keeping with the improved global economic outlook over the past two years, the Central Bank of the United Arab Emirates reported that in the months of January to September 2017, foreign residents in the UAE sent Dh121.1 billion to their home countries or other recipients abroad (up 2.6% than the same period in 2016). This sentiment was echoed by the World Bank which estimates that remittances to low- and middle-income countries were expected to grow by 3.5% in 2018, to US$466 billion, while global remittances will grow by 3.4% to US$616 billion in 2018.
The market is expected to grow in the future due to increasing international migration, decreasing remittance costs, increasing disposable income, improving economic growth, growing refugees population and growing urbanisation. The report outlines key trends of this market as the growing trend of mobile payments, and the increasing number of money sending options. However, they warn that there are some factors which can hinder the market growth, including government regulations and de-risking practices. In the UAE, the Central Bank — the country’s main regulator — recently issued a stringent set of new AML/CFT standards that all money exchange houses must comply with by January 2019. This move is in direct response to a number of US$ correspondent banks and local lenders cutting ties with exchange houses due to the prohibitive compliance costs they must have in place in order to mitigate the risk of money laundering and financing terrorist activities even further.
These new regulations — which include requiring exchange houses to appoint a compliance officer, to check and record the identification of the senders and receivers of all money transfers, to make all money transfers between exchange houses in the UAE via the central bank’s electronic transfer system, and to avoid cash for trade-related transactions and only to conduct transactions for charities and other societies which have permission from the government to collect donations and transfer funds abroad — have put a huge amount of pressure on exchange houses to enhance capital requirements to be able to comply with the new guidelines.
Since 2011, the International Association of Money Transfer Networks (IAMTN) has been raising awareness of the challenge the remittance industry is facing with regards to the decline in correspondent banking relationships. The Financial Stability Board (FSB) has recently published two reports regarding the decline in correspondent banking relationships, including recommendations to improve accessibility. IAMTN’s proposal for International Industry Standards has been included within these recommendations. These reports have been delivered to G20 Finance Ministers and Central Bank Governors.
GMTS-Dubai will be held on the 29–30 April 2018 in at the Dusit Thani Dubai in the UAE. Organised by IAMTN in collaboration with FERG, MAMSB, NAMT, ARCPA and Russian Electronic Money and Remittance Association, GMTS-Dubai 2018 will bring together a global network of innovators, disruptors and established participants in the remittance industry to examine the areas that are having the biggest impact in the money transfer industry and that are driving the financial services revolution in The Middle East, Central & South Asia and North Africa.Delegates will be able to attend a series of compelling seminars curated and delivered by trusted international speakers from US department of Treasury, Ripple, Cashaa, MoneyGram International, Axa, Ria Money Transfer, Paykii, Lialian Pay, Safaricom, World Bank, Stellar, Nafex, The Nerderlandsche Bank, Eurogiro, Bank Negara Malaysia, Financial Stability Board, UNCDF, iCyber-Security to name a few.
The International Association of Money Transfer Networks, (IAMTN) it is a not-for-profit membership organisation that represents money transfer operators. Founded in 2005, IAMTN works closely with governments, regulators, regional associations and all other stakeholders to champion the creation of the most effective, safe, reliable and efficient payment system. IAMTN is lead by Veronica Studsgaard (Founder and CEO) and Mohit Davar (Chairman). For more information about IAMTN, please visit www.iamtn.org.