亚开行-利用亚洲及太平洋地区汇款的数字化（英）-2021.7_40页_1mb

Summary of "HARNESSING DIGITIZATION FOR REMITTANCES IN ASIA AND THE PACIFIC"

Core Content

This document explores the role of remittances in Asia and the Pacific, emphasizing their economic importance and the challenges faced in the sector. It also discusses the potential of digitization to address these challenges and enhance the remittance experience for migrants and their families.

Main Points

Importance of Remittances to Asia

• Economic Impact: Remittances are a vital source of income for many individuals and a major source of foreign exchange for developing member countries of the Asian Development Bank (ADB).
• Regional Statistics: In 2019, Asia received $315 billion in remittances, making it the largest remittance-receiving region. India received the most, followed by the PRC, Pakistan, the Philippines, and Viet Nam.
• Contribution to GDP: For several Asian countries, remittances represent a significant portion of GDP, such as Tonga (40%), Tajikistan (26%), and the Kyrgyz Republic (25%).

Migration Patterns

• Global Migration: In 2018, one in three global migrants was from Asia, with 84 million migrants from the region.
• Popular Destinations: The Middle East is the most popular destination for Asian migrants, particularly from South and Southeast Asia. Australia, New Zealand, and the US are also major destinations.
• Intraregional Migration: About 63% of Central and Southern Asian migrants move within the region, with India being a major host for migrants from Bangladesh, Nepal, and Sri Lanka.

Remittance Pricing

• Global Target: The Sustainable Development Goal (SDG) 10.c aims to reduce remittance prices to 3% by 2030.
• Regional Variations: Remittance prices in Asia are generally above the global target. Sending to Central Asia is the cheapest, while sending to Pacific island countries is the most expensive due to lack of competition and weak digital infrastructure.
• Cost Factors: High prices are attributed to lack of competition, operational costs, compliance and KYC requirements, and de-risking practices by financial institutions.

Challenges with Remittances

• High Prices: Remittances are expensive, especially in Pacific island countries, where the average price is above 10%.
• De-risking: Financial institutions have restricted services to remittance operators due to perceived risks, which has limited access and increased reliance on informal methods.
• Cash Dominance: Despite the availability of digital options, cash remains the preferred method due to perceived control, trust, and lack of financial education.
• Informal Remittances: These are prevalent and include methods like hawala and hundi, which are often cheaper and faster but pose security and regulatory risks.

Impact of the Pandemic

• Digital Shift: The pandemic accelerated the use of digital remittance services, as physical agent locations were closed.
• Increased Acceptance: Communities and providers began to recognize the benefits of digital remittances.
• Challenges: The rapid shift exposed gaps in digital and financial education, particularly in rural areas.

Digitization and Remittances

• Benefits of Digitization: It offers convenience, speed, security, and affordability. It can also formalize informal remittances and improve financial inclusion.
• Case Studies: The document highlights successful digitization programs in the Philippines, Malaysia, and Pakistan, which demonstrate how digital tools can be effectively implemented.
• Role of Technology: Digital data enhances transparency, aids in risk management, and helps stakeholders understand consumer behavior.

Key Recommendations

1. Accelerate Digital Innovation: Encourage the development and adoption of digital remittance solutions.
2. Scale Digital Benefits: Ensure that migrant workers and their families can access and benefit from digital services.
3. Reduce Costs: Promote competition and lower operational and compliance costs.
4. Improve Financial Education: Educate users on the benefits and safety of digital remittances.
5. Harmonize Regulations: Create common standards for digital payments, eKYC, and fraud protection to facilitate smoother cross-border transactions.
6. Address De-risking: Encourage financial institutions to maintain relationships with remittance operators without blanket restrictions.
7. Support Informal Remittances: Formalize informal channels through regulation and technology to reduce risks and improve transparency.
8. Strengthen Infrastructure: Invest in digital networks and financial services in remote and rural areas.
9. Enhance Access to Banking Services: Ensure that remittance operators and their agents have access to banking facilities.
10. Develop Regional KYC Tools: Create shared KYC systems to improve trust and efficiency in the remittance sector.

ADB's Role

• The ADB has supported various initiatives to improve remittance systems, including the development of a KYC utility in Samoa.
• ADB has been involved in the Call to Action on Remittances, launched by the United Nations, to enhance the digital remittance environment.
• The document outlines the ADB's commitment to supporting the development and scaling of digital remittance channels to improve the lives of migrants and their families.

Conclusion

Digitization has the potential to significantly improve the remittance experience in Asia and the Pacific by reducing costs, increasing access, and promoting financial inclusion. However, challenges such as high prices, de-risking, and the dominance of cash must be addressed through policy reforms, education, and improved infrastructure. The ADB plays a crucial role in supporting these efforts and promoting a more efficient and inclusive remittance ecosystem.