Convergence of policy and business interests

1
Convergence of policy and business interests

• Henrik Parl
• Managing Director
• WSBI Conference on Remittances and Financial
  Inclusion
• Brussels, 20 May 2005

2
What is Eurogiro?

• A co-operation - club structure - between banks
  and post organisations. Established in 1989 as
  non-profit entity.
• A network for electronic exchange of
  international payments. In production since May
  1992.
• A gateway providing connectivity to strong
  alliance partners
• Western Union
• Universal Postal Union
• SWIFT
• Visa
• Federal Reserve bank of US

3
48 connections in 42 countries

• AF Afghanistan International Bank
• AT P.S.K./BAWAG
• BA Nova Banka
• BE Financial Post
• BR Empresa Brasileira de Correios e Telégrafos -
  ECT
• CA National Bank of Canada
• CH PostFinance/Swiss Post
• CV Cape Verde Post
• CN China Post
• CS Postal Savings Bank
• CZ CSOB
• DE Deutsche Postbank
• DK Sydbank
• EG CIB (Egypt) S.A.E.
• ES BBVA
• ES Correos y Telegrafos
• FI ING/Postbank (EUR transfers)
• FR La Poste
• GB Alliance Leicester Commercial Bank plc

• IE An Post
• IL Israel Postal Authorities
• IS Póstgíró
• IT Poste Italiane
• IT Banca Popolare di Sondrio
• JP Japan Post, Postal Savings Business
  Headquarters
• LU P T Luxembourg
• LV Latvia Post
• MA Barid Al Maghrib
• NL ING/Postbank
• NO ING/Postbank (EUR NOK transfers)
• PL ING/Bank Slaski
• PT CTT Correios de Portugal
• RO Banc Post
• RO Posta Romana
• SE ING/Postbank (EUR SEK transfers)
• SI Postna Banka Slovenije
• SK Postova Banka
• SN La Poste, Senegal

Shareholder
4
EUROGIRO has 13 years experience in the
remittance market

• Credit transfers
• standard (max. 3 days) and urgent
• to accounts with members
• to accounts with 3rd banks
• Money orders (cash/checks)
• standard
• TMO, semi urgent cash (2 day product)
• Western Union urgent cash
• (Card based services)

5
The Eurogiro strategy 2003 - 2008
6
The Eurogiro solution is suited for remittances

• Providing wide range of remittance products-
  Cash-, account- and card transactions
• Linking to leading remittance organisations-
  Global banks, Western Union, Universal Postal
  Union, Visa and FED
• Technological solutions for banks, postal
  organisations and alliance partners
• Multilateral payment handling and settlement
• Co-operation organised as non-profit set-up
• Providing links to postal network

7
Why are postal organisations well suited for
remittances?

• Network (600,000 outlets) in 180 countries
• Can handle cash (and often accounts/cards) and
  small amounts
• Existing products standards for cash Money
  Orders and the new Tele Money Order (TMO)
• Existing systems (Postal, Eurogiro, Western Union
  etc.)
• Branches located in immigrant areas (sending as
  well as receiving)
• Immigrants welcome in branches
• Strong global brand

8
Challenges for the remittance market

• Global growth is dependent on smooth financial
  systems and particularly less developed countries
  depends on remittance flows
• Remittance volumes are growing dramatically, i.e.
  increased economic importance
• Fragmented market with large differentiation in
  costs and without interoperability
• Big unofficial market resulting in bad statistics
  and lack of regulation and compliance
• No market standard
• Could a low value remittance standard provide
  global connectivity at decent costs, while
  allowing for competition?

9
Policy and business interest
Business interests
Policy interests

• Stimulate economic growth
• Stimulate developing economies
• Reasonable customer fees
• Global coverage
• Regulation, statistics and global compliance
  standards
• Interoperability of remittances service providers
• Competition
• Standardisation

• Growth stimulates volumes
• Wealth stimulates volumes
• Lower fees possible from growth and lower costs
• Better value proposition
• Less risk and lower costs
• Lower costs/better coverage
• Good if growth
• Enabling interoperability

10
Value from common remittance standard

• Reduce costs for customers and operators
• Standard open for all, providing interoperability
  both nationally and internationally
• Economic stimuli to developing countries
• Assisting developing countries in building
  critical infrastructure
• Conversion of un-official channels improving
  compliance, transparency and statistics
• Government role limited to setting standards,
  promoting process and securing competition
• Can be combined with initiative to provide
  accounts to all world citizens
• Potential major initiative in the year of Micro
  Finance