Presentation on theme: "FI Challenges and Opportunities Elizabeth McQuerry Federal Reserve Retail Payments Office"— Presentation transcript:
FI Challenges and Opportunities Elizabeth McQuerry Federal Reserve Retail Payments Office email@example.com
2 Opportunities Remittances are big business – transactions Remittance senders need entire range of financial services – new customer relationships Possible Community Reinvestment Act (CRA) credit for offering remittance services – compliance It’s ACH – no new systems need Develop new or deeper customer relationships with employers Access to Bansefi’s Beneficiary Account Registration (BAR) website FIs can easily pre-open a Bansefi bank account for a third- party beneficiary in Mexico
3 Challenges Potential customers may be undocumented and/or unbanked CBR/PBR format not familiar to many FIs or initially not available in all softwares CLABE (Mexican bank account number) perplexing to some customers and FIs FIs often not well versed in marketing or prepared to assist customers with ESL needs FX profit has previously been an issue for larger banks
4 Enrollment Process 1.Information Gathering Review “Mexico Service Manual” http://www.frbservices.org/Retail/pdf/FedACHiMxManual.pdf Form a cross-functional Implementation Team Enroll in service 2.Set Up & Testing Test formats end-to-end Prepare to roll out marketing campaign 3.Begin Offering Service Check list on internet: http://www.frbservices.org/Retail/pdf/DirectoMexico_NextSteps.pdf
5 Readiness Tips 1.Understand what’s different about payments to Mexico 2.Understand Mexican account numbers (info in Service Manual) 1.CLABE – 18 digit deposit account number constructed from Mexican bank ABA number, locality code, account number and check digit 2.Debit cards - 16 digits number assigned by VISA but linked to CLABE account 3.Include beneficiary name and other required fields 4.Provide internal training for front line and back room staff
6 Happy FIs 1.Directo a México FIs with a commitment to working with Hispanic and/or new immigrant communities FIs desiring to build new customer constituency and strengthen community ties FIs with employer relationships (new account holders with Direct Deposit; automated transfers; etc.) Ideal for small and medium size FI 2.F3X Pilot FI wanting to manage own foreign exchange FI with corporate customers needing to pay invoices in foreign currency Ideal for Top 50 FI
7 Industry Issues How to bring back office tool (ACH) into bank lobby to serve customer needs and processing efficiency? How to make FIs more comfortable sending cross- border payments? How to make FIs more knowledgeable of and confident with compliance issues? How to ensure that “Cross-Border II” gets off to best start – industry education, IAT capability in all softwares, processor readiness, operator readiness, provide FI tools to be successful?