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.
New inspiration from the UK
Of course, the road is not yet well-paved; indeed, significant potholes exist in the banking realm. At the Global Money Transfer Summit (GMTS) successfully held in London last month by IAMTN, we learned that while new banks are encouraging MSBs to apply, many roadblocks remain. Our industry will need to continue policing itself to build more trust among banks and regulators. The Bank of England has announced that is extending direct access to its Real-Time Gross Settlements systems (RTGS) accounts to non-bank payment service providers, widening access to the UK’s payment system such as Faster Payments, Bacs, CHAPS, LINK, Visa, and, once live, the new digital cheque imaging system. The move is made to foster technology innovation and “level the playing field”. This move seems to be echoed in other countries.
And in the US?
Back on this side of the Atlantic, the large financial institutions do not offer much solace. Attempts to obtain an MSB account with a typical behemoth can be less fun than a combination of influenza and poison ivy. Long approval process, demands for large deposit amounts, lack of transparency and the ever-present risk of being categorically dropped due to “reputational risk”—these factors comprise the frustration of seeking a strong relationship with any of the “big banks”.
So, where are we?
You must attend this year’s IMTC WORLD in Miami at the end of November to learn more on how derisking has progressed in 2017. At last year’s conference, we had literally JUST elected a new US President. Many conference attendees were concerned or downright afraid of the consequences for our industry.
Fast forward to November 2017: while uncertainty has become the new normal overall, the money remittance industry is still growing, developing, and changing. New entrants, new ideas, new technology, and new thinking are all emerging, and the consumer is the ultimate beneficiary.
We have more banks represented at IMTC than ever before plus some of International Financial Entities (IFEs) created by Puerto Rico’s OFIC will be at IMTC WORLD offering bank accounts to MSBs. See you later this month… bring your curiosity. Leave your pessimism and winter coats at home!