As you recall from the earlier blog, there are many reasons for MSBs to be cautiously optimistic: new banks are opening with a focus on various types of MSBs, regional and community-based financial institutions are gearing up to perform appropriate due diligence on potential clients, online firms who do not require branches for deposits are springing up rapidly and regulators are able to distinguish quality within the MSB industry vs. the historical “one size fits all” approach. The combination of these factors is opening doors for money transmitters, pre-paid providers, 3rd party processors and others in our much-maligned industry.
Key positive developments in banking for MSBs
It’s been a bleak period for money transmitters over the past several years. The specter of derisking —that business-killing policy of many banks in the US and globally—may be disappearing. At least in the US where other entities are stepping up. Our colleagues in other parts of the world are still seeing their local banks derisking yielding to the pressure of large global banks.
So, in preparing for the panel on “Derisking and MSB Friendly Banks” that I am coordinating with Hugo Cuevas-Mohr for IMTC WORLD 2017 I came up with 7 emerging factors that are giving hope to a strong, but beleaguered industry.