Remittances from migrants have received considerable attention this decade, with World Bank estimating the global remittance market at $414bn for 2009, of which over 75 percent are flowing into developing countries. India, with an estimated migrant population of 25-30 million, receives over 11 percent of the global remittances making it the single largest recipient country for remittances, followed by China, Mexico and Philippines.
The onset of the global financial crisis in 2008 led to a moderate decline of six percent in remittance flows to developing countries in 2009 vis-à-vis an average year-on-year growth of 20 percent witnessed since the start of the decade. As per World Bank estimates, the growth trend will resume this year onwards. India inflows have remained comparatively resilient in 2009, with recorded flows of $49bn.
ICICI Bank, India’s largest private sector bank, recognised the remittance opportunity early on in the decade and focused on catering to the diverse needs of the Indian migrants and their recipients in India with a host of contemporary services. ICICI Bank has been the leading remittance player in the India remittance market, enabling remittances from across 40 countries worldwide into India.
On the origination side ICICI Bank has tailored offerings for the diverse segments of the Indian migrants – accessible through its wide branch network, internet, telephone and correspondent bank channels. On the recipient side it leverages the electronic payment infrastructure in India – offering electronic credits into accounts with over 60,000 bank branches of over 100 banks in India, electronic credits into over 15 million resident VISA cards and issuance of bank drafts in India.
Besides catering to the banked customer segment in India, ICICI Bank has launched solutions for under-banked and un-banked customers. Its remittance card targets the urban and semi urban population, offering easy access to funds as well as the advantanges of maintaining a zero balance account and a higher ATM withdrawal limit.
Benefits to migrants and recipients
With an intensive use of technology and centralised operations for building robust straight-through processes, ICICI Bank has favourable cost structures. The benefits of lower operating costs are passed on to the end users in terms of competitive pricing and low cost services compared to traditional modes of money transfer. With a customer-centric approach, ICICI Bank has placed strong focus on establishing a customer engagement infrastructure to ensure round-the clock servicing of its clients.
Current market scenario
Given the large size of the India remittance market, over the last few years the market place has witnessed the entry of multiple players, spanning from Indian and foreign banks to money transfer operators who have launched comparable yet elementary online and offline remittance services for facilitating money transfers into India.
Remitters, today, have varied remittance service needs and which are different to those existing at the start of the decade, given the essential distinction in offerings prevalent then and now. Earlier, the traditional modes of transfers like international wires, cheque or cash-based transfers led the remitter to desire simpler, low-cost and secure modes of transfer for small-value remittances.
Today with the elementary requirements being addressed over a decade, the secondary requirements of the remitter are evolving and discerning. For example, post the global crisis where volatility of the currencies has substantially increased, the remitter of today desires secure and faster services at an assured rate for his/her money transfers that is meant mostly for family maintenance in India.
Customer-centric approach
At ICICI Bank, it is strongly embedded that customer centricity is the key differentiator in its product offerings. Aligned to this philosophy, a host of initiatives are deployed that also address the evolving secondary needs of the remitters:
1. Offering guaranteed rates on online offerings, thus assuming exchange rate volatility risk on behalf of customers.
2. Offering faster money transfers within 24 hours via a partnership approach with a large number of other banks and money transfer companies at origination.
3. Enhancing reach to under banked and un-banked recipients via enabling payout channels that encourage financial inclusion.
4. Proactive service levels and on-boarding programmes specially launched to handhold new migrants through their money transfers.
These offerings have been well-adopted by customers as they now have a wide bouquet of money transfer services available under a “one-stop ICICI Bank remittance service shop” at value-for-money pricing, depending upon their essential money transfer needs at any point in time.
With a significant share of the India-bound remittance market, ICICI Bank is now geared towards extending its unique bouquet of remittance offerings in the non-India remittance corridors.
