Promoting the use of regulated channels: the role of sending and receiving countries


Dilli Ram Pokharel, Director, Research Department, Nepal Rastra Bank

Isaku Endo, Senior Financial Sector Specialist, World Bank Group

Nika Naghavi, Senior Insights Manager, Mobile Money Programme, GSMA

Leta Havea-Kami, Managing Director and CEO, Tonga Development Bank


Nik Mohamed Din Nik Musa, Director, Money Services Business Regulation Department, Bank Negara Malaysia The value of remittances sent through unregulated channels may be as much as that sent through regulated ones. Migrants use informal channels partly because they lack awareness of other options, but also because they see convenience in using them. Unregulated channels, while perhaps less safe, directly target migrants and their families, offering convenience – proximity, lower costs, and fewer restrictions – that the formal market does not always provide.


The panel discussed methods for encouraging the use of regulated channels. These include:

Promote financial literacy, especially with regard to: the advantages of regulated channels (e.g., safety, protected assets, redress mechanisms), the availability of mobile options, and the value of savings accounts versus “cashing-out” remittances.

Market remittances and other financial products directly to migrants and their families, including migrant communities and organizations. Publish information on costs of remittances and other services so migrants can compare options.

Link remittances to other financial services. The use of savings, investment, and insurance products will draw people into the regulated sector and increase their financial literacy.

Collect and publish data on remittances and trends. These data can be used to discover where the greatest need exists and suggest how to create better products.

Promote dialogue. The financial industry should share lessons learned and best practices. The public and private sector should work together to ensure regulations protect the public without stifling the market.

Make transferring and receiving money more convenient, for example by establishing simple identification and KYC policies. In parallel, fintech services should be enhanced in order to increase the use of mobile money, provide 24-hour accessibility, reach further into isolated areas, and reduce transfer costs.

Design products with the user in mind. Migrants and their families have needs that differ from other customers, and among themselves. By focusing on customers, products can have a “human-centered design”, and be tailored to meet the needs of the un(der)served segments.

Embrace the Global Compact on Migration (GCM). By making migration safe and regular, migrants will have less fear of using the regulated market and be better equipped to use it.


In order to compete with unregulated channels, the financial sector must focus on:

  • Access: remittances should be linked to other services (bill payment, savings, etc.);
  • Convenience: remittances and other services must be accessible (or mobile) and easy to use; and
  • Education: migrants need to be made aware of the safety and security that comes with the regulated financial sector

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