Banks experience comeback in money transfer market
New data shows the increasing importance of traditional financial institutions in money transfers, spelling a comeback for banks following recent years of declining market share.
Analysis by money transfer business Small World FS reveals a 59% increase in the number of direct bank deposits it processed from the UK between 2014 and 2016 – compared to a combined 39% growth for all other money receiving methods.
Regionally, bank deposit transactions to South America rose by 81% compared to 34% for other pay-out options. At the same time, Asia experienced a 124% boost in demand for instant transfers into bank accounts, outgrowing by far the still very strong 48% increase in other transactions. Global efforts to accelerate adoption of bank accounts have had a significant impact, particularly in Asia and countries such as India. Data by the World Bank shows that between 2011 and 2014, over 700m people in the world received access to a bank account for the first time. While the current number of ‘unbanked’ people is still estimated to be around 2bn, the World Bank and its partners have a target of adding another 1bn bank account holders by 2020.
In the context of the growing importance of bank deposits, Small World FS is continuing to bolster its direct bank relationships, announcing a new partnership with Sri Lankan Pan Asia Bank, which describes itself as the fastest growing commercial bank in Sri Lanka. Pan Asia maintains a network of 83 branches and offers a full range of retail, SME and corporate banking products and services. At the same time, Small World FS has also entered new agreements with two banks in Honduras: Banco Atlántida, which is the country’s leader in offering a truly nationwide service coverage, and SME-focused Banrural.
The value of direct partnerships with banks for independent money transfer operators lies in the fact that they enable instant money transfers into accounts, and circumvent slower and costlier international bank transfer schemes. As such, Small World FS already maintains a network of almost 800 representatives from banks and building societies, as well as post offices and mobile networks, to transfer money directly to more than 2.5 billion bank accounts around the world.
“Over the last two years, direct bank deposits have clearly outgrown other pay-out methods and this trend is set to continue. This development will define the future of the money transfer market,” commented Nick Day, Founder and CEO of Small World FS.