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FI Challenges and Opportunities Elizabeth McQuerry Federal Reserve Retail Payments Office

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Presentation on theme: "FI Challenges and Opportunities Elizabeth McQuerry Federal Reserve Retail Payments Office"— Presentation transcript:

1 FI Challenges and Opportunities Elizabeth McQuerry Federal Reserve Retail Payments Office

2 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 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 4 Enrollment Process 1.Information Gathering  Review “Mexico Service Manual”  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:

5 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 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 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?

8 8 Directo a México Volume

9 9

10 10 FIs sending payments No. of FIs

11 11 Program Contacts Primary Contact Elena Whisler Program Specialist – Directo a México Retail Payments Office (404) 498-7879 Secondary Contact/ Operational Issues: John F Morris Retail Payments Office (404) 498-8283

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