According to recent World Bank predictions, remittances might drop by up to 20% as the coronavirus takes its toll on migrant employment and pay levels. Remittances, on the other hand, are more vital than ever in these times of uncertainty.
According to research, remittances mitigate poverty in low- and middle-income nations, enhance nutritional results, are related to higher education spending, and help to minimize child labor in disadvantaged homes. A decrease in remittances reduces households' ability to spend in these areas because more of their funds are devoted to addressing food shortages and immediate livelihood requirements.
This provides a powerful opportunity for digital-first remitters and comparable fintech businesses to not only demonstrate purpose in aiding consumers in times of difficulty, but also value in offering a fair, dependable, and coronavirus-friendly service.
The world altered in an instant when the coronavirus hit. Working structures shifted from China to the United Kingdom, schools were closed, and social lives were replaced with special distancing measures. For many, this has resulted in additional obligations, such as picking up work from furloughed employees and managing home-schooling tasks.
However, its influence on the migrant population has frequently gone unreported. Migrants have been unable to return home to see loved ones since all but essential travel has been prohibited. Furthermore, with roughly a quarter of the UK workforce furloughed, many from historically migrant-occupied professions, the epidemic has exacerbated already-existing demands to be connected with loved ones while managing money effectively. The problem for migrants is finding the appropriate balance between financially sustaining themselves and caring for others who rely on the extra money back home.
It is in this context that digitally native money transfer services may play a critical role in reinventing remittances. They must demonstrate that they understand the difficulties that migrants confront and are on their side. As a result, they can increase faith in digital and illustrate how it can provide rapid, transparent, reasonably priced, and convenient transfers.
In some ways, the pandemic has generated a one-of-a-kind consequence for traditional and digital remittance companies. There has been considerable momentum in developing digital service engagement and acceptance among their consumers over the previous few years. Unlike other industries that have been propelled to digital transformation by a need to preserve a competitive edge, such as retail, the remittance sector has been relatively hesitant to embrace a technology-powered future. This is due to the fact that conventional cash-based remitters with physical storefronts have earned the confidence of a devoted client base.
This is changing, though, in pandemic conditions. With the option of visiting a physical firm no longer available due to lockdown restrictions, the consumer is driving the need for digital transformation. They realized that their present routines and habits needed to be replaced by an online service. This has resulted in new product releases for existing remittance businesses. However, it has provided a chance for digital rivals to demonstrate the simplicity, accessibility, and durability of the service they provide.
Fintechs must take the initiative to explain their purpose and value in times of adversity as customers seek other choices.
Because of the advantages of digital, these companies can give assured and fair exchange rates, guaranteeing that migrants who are experiencing financial difficulties are not bitten by hidden remittance fees. Furthermore, they can give constant and accessible assistance. TransferGo, for example, has in-country agents in each market in which we operate. Customers will be able to communicate with agents that understand local discourse and concerns and can advise on a suitable solution as a result of this. It guarantees that clients, particularly those who are new to digital remittances, are not alienated or perplexed while interacting with an agent in another nation.
Furthermore, their worth is derived from the transparency of digital. In contrast to untrustworthy traditional methods, digitally native money transfer services can give accurate and real-time data on how long remittances will take and provide clear information on where a payee's money is. Where migrants are already under considerable strain to support for themselves and loved ones back home, remittance services should ease, rather than add to, their misery. There is an opportunity to establish trust with a new client base and keep migratory communities linked with people they cherish most by showing purpose and value via the epidemic.
The coronavirus provides an excellent chance for fintech to demonstrate its value and purpose in the remittance industry. While most of the globe has shut down, the migrant population is as dependant on money transfers as it has always been. Families and loved ones continue to demand more money, maybe even more so now that the epidemic has created economic instability and employment insecurity. Because it is not possible to visit real businesses and engage with customer care representatives in person, migrants are more inclined to use digital remittance services. With all of this in mind, fintech companies must promote their transparency, fair and accurate exchange rates, and ease-of-use to assist migrants in staying connected with loved ones back home and understanding why digital is the future.