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Mumbai-based ICICI Bank is something of a poster child for banks in the remittance business. India's second-largest bank, ICICI handles more than one-fifth of the money coming into India from its migrant workers all over the globe. India, which receives more in remittances than any other country in the world (US$42 billion in the 12 months ending March 2008, ICICI says), also is the No. 1 destination for remittances originating in the U.S.
ICICI Bank's emphasis on the remittance business, of which U.S. banks have a paltry share, is clear from its Web site. A new smsNcash service, prominently advertised on the bank's home page, allows India residents without bank accounts to use text message authorization codes to withdraw funds sent to them. The authorization codes are known to both the sender and the recipient.
Like others, ICICI sees remittances and mobile banking as a route to the unbanked. After all, beneficiaries may not have bank accounts, but they have cell phones.
ICICI, which has operations in 19 countries, including the U.S., intends to expand its remittance capabilities into new markets. "We intend to replicate the India experience abroad," Manish Misra, general manager of ICICI, told a SWIFT remittances roundtable last year.
Misra emphasized the need to collaborate with charitable groups, post offices, retailers and other nontraditional outlets to create an alternative distribution system to bank branches in remote areas. "Treating remittances as just another banking transaction is the mistake most make," Misra said.
To enable the smsNcash service, ICICI developed several proprietary software systems, according to Jayant Prasad, head of remittances for the bank. "ICICI recognized this as a strategic business opportunity in the beginning of this decade," he says, and addressed it with "a suite of products catering to diverse customer requirements."
Catering to blue-collar Indian migrants in certain locations is very different from serving the tech professionals that dominate in the U.S., Misra noted at the SWIFT event.
"Any bank looking at this market seriously would need to develop a platform customized to handle the retail nature of the transaction," adds Prasad, who notes that ICICI developed two systems to process payments from partners, another to process its own remittance instructions generated online, another for foreign exchange conversions and a workflow application for remittances. "Most of the processing is automated, with uptime above 99 percent," he says.