Stocktake of remittance service providers’ access to banking services
This report provides a stocktake of remittance service providers’ access to banking services and an action plan to address the gaps and barriers identified in the stocktake.
The reduction in correspondent banking relationships has also had a significant impact on remittance service providers’ ability to access banking services. Further, the impact is particularly acute in those developing countries where remittances represent a significant percentage of Gross Domestic Product.
The stocktake identifies a variety of intertwined drivers for the termination of banking services to remittance service providers’, including profitability, the perceived high risk of the remittance sector from an anti-money laundering/counter terrorism financing (AML/CFT) perspective, supervision of remittance service providers that ranges from active and effective to complete absence and, in some jurisdictions, weak compliance with international standards, particularly those relating to AML/CFT.
The report makes 19 recommendations in four areas to address gaps and remaining barriers to banking services by remittance service providers:
Promoting dialogue and communication between the banking and remittance sectors;
Improving the implementation of international standards and oversight of the remittance sector;
The use of innovation in the remittance sector and its possible role in enabling remittance service providers’ greater access to banking services; and
Technical assistance relating to remittances.
The FSB, Financial Action Task Force (FATF), Global Partnership for Financial Inclusion, IMF and World Bank will coordinate to monitor take-up of the recommendations and report back to the G20 in July 2019.