Elena Novokreshchenova, vice president of Europe at Remitly, writes for PaymentExpert on how the global health pandemic has impacted the remittance market as the payments industry becomes increasingly digitalised.
It is easy to think that we’re living in a golden age of technology empowering consumers. After all, the buzzwords ‘digital transformation’ and ‘digital accessibility’ have been a priority for the financial sector for many years.
The reality, however, is that legacy infrastructure, skills gap and difficulty in migrating customers to new services have all hindered digital adoption. Yet, COVID-19 has made digital acceleration a necessity and no longer a nicety.
This is especially important within the remittances sector. There are more than 270 million migrants globally, which is more than the population of American adults – they shouldn’t have to queue up at a newsagent in 2020.
Migrants in the UK sent over £8bn home and have been under-serviced and frequently exploited by traditional, offline services. Even for many online innovators, they are not a priority.
Access to online digital payments platforms must now become a priority for those within the financial industry. Not only because our new ways of working and living require it, but because inclusion should not be a second thought or add-on to any financial service.
How COVID-19 has impacted the Remittance Market
The last couple of months have been difficult for many people globally. Social distancing measures, cancelled plans, and events have left many isolated. For migrant workers, so very often in the frontline, it is even more difficult. These are our key workers – nurses, doctors, cleaners and bus drivers – and they are physically separated from their loved ones by oceans in addition to social distancing.
Immigrants have been the backbone of the UK during these troubling times, often committing long hours for little pay to keep the rest of us safe. Yet, they and their loved ones may be the worst affected by the economic and social impact of COVID.
For example, according to a recent report by The World Bank, global remittances are projected to decline sharply by about 20 percent in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown. With the projected fall mostly coming down to a fall in the wages and employment of migrant workers during the economic crisis.
Digital access, speed and convenience
The inability to send money physically has some correlation with the drop in global remittances. Many immigrants are accustomed to dropping money off, in person, at a newsagent or small money agent kiosk which are now much harder to access because of COVID. Online international money transfer services have stepped in to help immigrants send money home during these times.
The fact that these companies, like ourselves at Remitly, are available 24/7 and via an app, means that customers can use these services whenever and wherever they need them.
Despite the current COVID crisis, we’ve seen an increase in the adoption of our service and others like ours as customers seek new ways of sending money abroad. From February to March of this year, we saw a significant spike in global transactions as customers searched for new reliable ways of supporting their loved ones.
However, it’s not enough to merely be online as a service. Immigrants also deserve great apps, first-class customer service, fair and transparent pricing. Online financial services need to be made more accessible, quick to use, and easy to understand. There are a number of ways to do this – from a smooth sign up process that clearly explains how the service works and what is needed to use it to ensuring that self-service is easy to find and helps the customer throughout the process.
Designing and building with the customer in mind mean accelerating efforts to understand and listen in order to provide the right information or solution, when it is needed. This delivers peace of mind and helps build a trusted, long-term relationship with this underserved community.
After the impact
Extending high-quality financial services to more people has many positive effects for society. The UK has over 9.5m immigrants – it’s time that their needs are met by the providers of financial services designing with them in mind – to help them stay connected with family, however, far away they may be.