Candid Conversations: Remittance Management

We asked ProgressSoft’s Kuwait Country Manager, Tawfiq Khalili, all about remittance management; from why the solution was created, to how it impacts the wider industry today.

Here are the interesting results.

1. What triggered the need for the creation of a Remittance Management solution?

During the last decade, the world witnessed massive development in innovations related to technology and telecommunication that had a major impact on the financial sector, payments industry and cross-border fund transfers. This provided customers with new and diversified alternative channels and mediums to conduct transfers and secure business needs in a highly competitive environment.

The remittances industry was no different. Several alternatives of direct corridors between banks, financial institutions, exchange houses and others opened new doors for secure mechanisms of fund movements in a smoother and faster approach. Examples of these alternatives include MoneyGram, Western Union, Xpress Money and Ripple Net, in addition to the original SWIFT network and GPI compliance that helped the market achieve transparent tracking of payment routes until they reach their final beneficiary.

Such innovation leverages the level of competition as well as customer expectations and demands in which cost and time are now essential factors in remittance management that customers no longer compromise.

Accordingly, ProgressSoft created its Remittance Management System (as part of its Payments Hub Suite), to support the main players of the remittances domain including banks, payment service providers, exchange houses and financial institutions and provide them with one smart remittance engine that serves their business needs and:

1. Integrates with an unlimited number of cross-border networks
2. Supports a wide range of industry standards such as ISO 20015, 20022, 8584, etc.
3. Enables multiple customized payloads
4. Supports different market infrastructures according to pre-defined destination channels
5. Provides massive flexibility for financial institutions

2. Can you provide us with more details on how the solution works?

ProgressSoft’s Remittance Management System acts as a smart-routing engine that comprises standard Application Programming Interfaces (APIs) for quotation requests and payment initiations used to identify the most optimal channel for remittance submission.

The solution orchestrates an end-to-end remittance process that covers all the necessary business and compliance validations. It utilizes its rich directories of institutions’ correspondents, networks’ directories, correspondent ratings and defined Service Level Agreements (SLAs) to find the best-fit corridor, network and path in terms of cost and time efficiency to submit the remittance.

In addition, the solution’s integration with SWIFT’s Standard Settlement Instructions (SSIs) facilitates the flexibility to build a route for a submitted transfer. This results in faster routing time and reduced implied correspondent fees.

The solution also integrates with liquidity and fund management systems in respect of institutions’ nostro balances, foreign exchange tickers and treasuries for online foreign exchange rates management. This is in addition to identifying any implied discounts or preferential rates according to the remitter’s segment, industry, beneficiary country, or selected channel. Finally, the solution also integrates with Customer Relationship Management (CRM) solutions to identify marketing campaigns or promotions valid at the time of remittance in respect of charges, fees, taxes or foreign exchange rates.

Ultimately, the solution enables the financial institution to provide their customers with 3 main features that determine the remittance industry’s success which are:

1. Minimal and competitive remittance service costs
2. Fastest possible remittance routes
3. 24x7 remittance services

3. How is the solution changing the industry?

The solution is designed to provide institutions with flexible and rapid additions of new corridors with correspondents over different networks. Onboarding new correspondents over these networks includes defining the SLAs, fees and charges, enabled lists of currencies and foreign exchange handling for submitted remittances. This assists the smart routing algorithms within the solution to provide the institution’s clients with different alternatives for each remittance request, including the estimated implied costs and time to reach the beneficiary, in real-time.

All this is done while the solution also takes into account other factors such as the correspondent’s availability of funds and the institution’s optimal corridors. Therefore, the solution is the first of its kind to provide different remittance alternatives, identify optimal routes and provide clients with an automated, 24x7 remittance mechanism.

Finally, the solution opens new doors for the institution to expand its correspondents database to additional channels and corridors that help to continuously improve its competency and service levels with its clients.