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The Importance of Remittance in the Global Economy

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As efforts to control and manage Covid-19 stabilise, most of the world is now in an adjustment period facing a future where economic concerns have to work alongside pandemic precautions.

While the World Bank has already projected a 20% decline for remittance exports and imports globally due to the economic shortfall caused by restriction effects, the new era is bound to see this service as its most essential.

1. Cheaper digital transfers

mobile banking remittance transfer
Image credit: Bankenverband | Flickr

Digital businesses have seen a boost in demand of services since lock downs were enacted, overtaking traditional methods in response to social distancing laws. Combined with the ensuing boom to go cashless in order to avoid cross contamination, the outlook for relying on remittances on a smaller but more frequent scales looks promising.

2. Easier financial procedures

piggy bank money
Image credit: Marco Verch | Flickr

The increase in shifting to digital transactions will also require services to make their amenities easy to use and available to all. With the advancement of all technologies focusing on usability ‘as easy as a touch away’, surely a linear, user-friendly method of banking transactions is underway.

3. Recognition as an essential service

As largely overlooked as it is, remittance services have the power to shift entire economies for the better, as evident by the gradual improvement of developing countries whose citizens have gone overseas for job opportunities.

The money remitted home by these workers have lifted families out of the poverty bracket, made education and healthcare affordable, and have essentially upgraded the quality of living for many communities. While a significant proportion of these workers have been put out of their jobs due to the cut-down measures to deal with the economic tightening, inward and outward remittance is still a major method of transaction around the world.

essential service
Image credit: Sharon Mccutcheon | Unsplash

The flow of money abroad to fund purchases of imports and skill sets (Outward Remittance), as well as the receiving of international payments quickly and conveniently (Inward Remittance) is sought to be a supporting service in maintaining the currency exchange rates and stabilising stock market trades.

This and the shifting of consumer habits increase the need for a secure and stable remittance service.

CIMB’s Remittance services – Foreign Telegraphic Transfer (FTT) ticks all the right boxes of the points stated above. The Outward TT ability has a reach-ability to over 200 countries, and the Inward TT function secures incoming transactions from international banks.

As one of Malaysia’s primary Remittance service providers, CIMB Bank offers guaranteed best FX rates among commercial banks, with a competitive service fee of only RM10 -RM30 (depending on destination), with NO additional hidden charges!

Click here for more information on CIMB Remittance services.

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